Hormuz disruptions push 2026 oil price forecasts higher

Thursday 01 - 11:15

By: Azzat Manal Azzat Manal

Hormuz disruptions push 2026 oil price forecasts higher

Oil market expectations for 2026 have moved higher as continued disruptions in the Middle East and reduced flows through the Strait of Hormuz raise concerns about the pace at which global crude supplies can return to normal.

A Reuters poll of 30 economists and analysts showed that the average forecast for Brent crude in 2026 had risen to $89.05 a barrel, up from $85.08 in the previous month's survey. The average forecast for US West Texas Intermediate crude also increased, reaching $83.90 a barrel compared with $80.20 previously.

The upward revisions reflect growing expectations that disruptions to Gulf exports could persist longer than previously anticipated. Analysts surveyed by Reuters said the recovery of oil flows through the region may take time, increasing the importance of inventories and alternative supply routes in balancing the market.

The Strait of Hormuz remains particularly important because of the volume of energy products normally transported through it. US Energy Information Administration data show that total oil flows through the strait averaged just 4.9 million barrels per day in the second quarter of 2026, compared with 21.6 million barrels per day in the final quarter of 2025 before the conflict began.

The disruption has already produced significant price volatility. Brent crude began 2026 near $61 a barrel before climbing to $118 by the end of the first quarter, according to the EIA. The agency said the increase was closely linked to military developments in the Middle East and the subsequent disruption of flows through the Strait of Hormuz.

More recently, signs of recovering exports have helped ease some of the immediate supply pressure. Brent was trading around $98.67 a barrel on October 1, while WTI stood near $90.09, as investors assessed recovering Gulf exports and diplomatic efforts involving the United States and Iran.

Saudi Arabia has resumed exports through the Yanbu terminal and its East-West pipeline, while other regional producers have gradually restored part of their production. Nevertheless, Reuters reported that Gulf exports remained vulnerable to the wider security situation and that OPEC+ producers were still operating below their pre-conflict levels.

The supply outlook is also being shaped by production outside the Middle East. US oil production reached a record weekly level of 13.955 million barrels per day by September 25, according to EIA data cited by Reuters. Higher US output could provide some additional supply to international markets, although producers remain cautious about the sustainability of elevated prices.

Oil inventories are another important factor. The depletion of stockpiles in major consuming countries has reduced part of the cushion normally available to absorb temporary supply disruptions. Analysts in the Reuters survey expect inventories to play a larger role in 2026 if Gulf exports remain below normal levels.

The outlook remains highly dependent on developments around the Strait of Hormuz and the broader Middle East. The EIA's September outlook assumed that flows through the strait would gradually increase and that alternative export routes would support the market, but it also expected some restrictions on Middle Eastern exports to persist through the end of 2026.

OPEC+ decisions will also remain closely watched. Producers are expected to maintain their current output targets for November, while the group prepares discussions over production quotas for 2027. Reuters reported that OPEC+ output in August remained around 5 million barrels per day below pre-conflict levels.

The higher 2026 forecasts therefore reflect a market balancing two opposing forces: the possibility of continued geopolitical disruption and constrained Gulf exports on one side, and rising production from the United States, recovering regional flows and eventually improving shipping conditions on the other. The evolution of the Strait of Hormuz will remain one of the key factors determining whether current price expectations are sustained or revised again.