UBS lifts Brent forecast to $110 as Gulf supply at risk
UBS has raised its forecast for Brent crude to $110 a barrel by the end of 2026, up from its previous forecast of $100, Reuters reported on 28 October. The Swiss bank also lifted its 2027 forecasts by $5 a barrel at each point, to $95 for March, $90 for June and $85 for September. The upgrade reflects an expectation that oil will remain elevated while Middle Eastern supply stays vulnerable to disruption amid geopolitical uncertainty. UBS said in a note: “Uncertainty around our forecasts remains elevated, reflecting the unpredictable nature of the Middle East conflict, and the pace of recovery in Gulf production and global oil demand.”
Shipping costs now drive the delivered price
Middle Eastern crude loadings have recovered substantially from the severe disruption earlier in the year, UBS said, but Gulf crude and condensate port loadings remain below pre-conflict levels. October also brought a record number of reported attacks on vessels in and around the Strait of Hormuz, raising insurance and freight costs and limiting tanker availability. Very large crude carrier rates from the Middle East to China have jumped to $30–$40 a barrel, compared with $1–$3 over the past decade, according to the bank.
Inventories leave little cushion
Global visible crude and product inventories have fallen by more than 500 million barrels since February, OilPrice reported in its account of the UBS note. UBS argued that an undersupplied market could push commercial stocks lower and sustain prices. Brent crude traded above $115 a barrel during Wednesday's trading, with the US benchmark, West Texas Intermediate, around $101–$102 a barrel in Wednesday's reported trading.
