UBS Cuts 2026-2027 Oil Price Forecasts as Hormuz Strait Supply Increases

UBS lowered its oil price forecasts for 2026 and 2027 after energy shipments through the Strait of Hormuz continued to rise. According to Jin10, UBS now expects Brent crude to average $84 a barrel this year, down $9 a barrel from its earlier forecast. The bank also cut its 2027 oil price forecast to $75 a barrel from $85. UBS said easing geopolitical risks and a rapid rebound in supply led prices to fall more than it had expected. The bank forecast that oil prices would rebound slightly to $80 a barrel in the second half of this year as floating storage in the Gulf region returns to normal and demand recovers. UBS added that the risk premium could be higher because the path back to normal conditions may remain uneven. It also said demand for restocking should continue to support prices through the end of 2027, but the scale of inventory rebuilding needed is smaller than its previously expected 1 billion barrels.