IMF Assumes Oil Prices Will Rise 41% to $96 a Barrel in 2026
Key Facts
The International Monetary Fund’s forecasts assume oil prices will rise by about 41% in 2026, to an average of $96 a barrel, with oil and gas shipments through the Strait of Hormuz resuming by March 2027, the Associated Press reported, citing the fund’s forecasts. This assumption sets a timeline for shipments to return; it does not mean the fund expects disruptions to continue throughout the first quarter of 2027. Nor does it establish that these figures represent an updated forecast for Brent crude compared with an earlier estimate. According to the news agency, the forecasts are based on the assumed increase in oil prices and the expected timing of shipments returning through the waterway. The agency said the fund based its estimates on “an increase of nearly 41% in oil prices this year, to an average of $96 a barrel,” and on shipments resuming by March.
In assessing the crisis’s impact, the fund said the effective closure of the Strait of Hormuz cut about 20 million barrels a day of crude oil and refined products from the market, equivalent to one-fifth of global consumption. This volume provides a direct measure of the amount disrupted relative to global consumption, rather than limiting the impact to crude oil shipments alone. By the end of May 2026, more than 1.1 billion barrels of crude had not reached the market, according to the fund’s estimate. That volume is equivalent to about 10 days of normal global consumption. The fund said the shortfall accumulated during the period of supply disruption, while one-fifth of estimated daily consumption represented the scale of the interruption when the waterway was effectively closed.
Market conditions before the war helped absorb some of the shock: supply exceeded demand by about 2 million barrels a day in the days before the war, according to the fund. Production outside the Gulf also rose by about 2 million barrels a day above 2025 levels, an increase the fund said exceeded expectations. But these gains did not prevent a market deficit in March–May 2026. The fund estimated the deficit at about 4 million barrels a day during that period and said it was almost entirely covered by drawing on global inventories. The response thus combined the earlier supply surplus, increased production outside the Gulf and the use of inventories to meet the recorded deficit.
In its July update, the fund assumed the strait would begin reopening in mid-July 2026 and conditions would return to prewar levels by March 2027. This was the dated baseline set out in the fund’s earlier update, while the forecasts reported by the Associated Press assume shipments resume by March. The fund’s managing director said on October 1 that redirecting supplies from Gulf Cooperation Council countries had kept energy flowing to global markets and contained the supply shock. She said Gulf authorities had redirected vital supplies away from the strait, “keeping energy flowing to global markets.” In October remarks, the fund linked its forecast of a strong recovery for GCC countries in 2027 to the gradual normalization of shipping, warning that continued or worsening disruption could delay the recovery.
The assumption that shipments will return comes as the Associated Press reported on October 22 that there were 28 attacks on ships in October, the highest number since the war began, according to Lloyd’s. The news agency reported that tankers were still transporting oil through the waterway under U.S. protection, despite the attacks. These developments add a security context to the IMF forecast’s assumption that shipments will resume by March 2027. Meanwhile, the October edition of the World Economic Outlook projected global economic growth would slow to 3.1% in 2026, then rise to 3.4% in 2027. It also projected global headline inflation would rise to 4.7% in 2026 before falling to 4.1% in 2027.
After the strait is fully reopened, resuming a large share of oil flows could take two to three months, according to industry estimates cited by the fund. This estimate means that flows would not recover immediately even if the strait fully reopened, with the projected recovery period extending several months beyond reopening. The fund warned that a prolonged halt in production could lead to permanent output losses. These risks increase, the fund said, when financing needed to restart wells is scarce. Gradual normalization of shipping therefore remains a condition the fund cited when discussing a recovery in GCC countries in 2027.