UBS Raises Brent Forecast to $110 for End-2026 and $95 in March

Key Facts

UBS raised its Brent crude forecast to $110 a barrel by the end of 2026, from $100, and increased its estimate for March 2027 to $95 from $90, according to an update cited by Investing.com. The revision also lifted its June 2027 forecast to $90 from $85, and its September forecast to $85 from $80. The bank said its near-term outlook for oil remained "moderately positive." But it noted that uncertainty around its forecasts remained high because the course of the Middle East conflict, the pace of recovery in Gulf production and global oil demand were difficult to predict. The new update puts year-end prices above UBS’s previous estimate, while its 2027 forecasts maintain a declining path through the months.

In the October 27 settlement, Brent futures fell $1.93, or 1.67%, to $113.88 a barrel, according to Reuters via Euronext; they had closed at $115.81 in the previous session, according to EL7 data. Reuters attributed the decline to the market’s focus shifting toward Middle East peace talks. Supply risks nevertheless remained, with the report citing Houthi attacks on Saudi Arabia. The settlement reflected a daily decline at a time when crude prices were still above UBS’s year-end forecast. The session’s move highlights how de-escalation news and supply risks intersect in oil pricing.

UBS said crude flows from the Middle East recovered to nearly 18.8 million barrels a day in early October, compared with 19.9 million before the conflict, but had not returned to their previous level. The bank added that at least 30 attacks on ships were recorded around the Strait of Hormuz during October, the highest monthly tally on record. These indicators put transport security alongside production volumes among the factors the market is monitoring. Pressure also extended to tanker rates from the Middle East to China, which reached $30 to $40 a barrel, compared with $1 to $3 in the previous decade. This raised the cost of shipping crude to a major Asian importer compared with the range that prevailed over the past decade.

UBS estimated that global visible oil inventories had fallen by slightly more than 500 million barrels since February, with most of the decline resulting from drawdowns in strategic reserves. As those drawdowns near their end, the bank expected commercial inventories to decline at a sharper pace. In its previous update, issued on September 9, UBS said oil stored at sea had fallen by 150 million barrels over the two months through that date. It also noted that China’s crude imports recovered in August to nearly 9 million barrels a day, from 7.15 million in June. These figures provide context for the price forecast revisions, as the decline in inventories coincided with a recovery in regional flows, although those flows had not returned to pre-conflict levels.

U.S. Energy Information Administration data showed that the average Brent spot price was $114 a barrel in September, up $23 from August, and the daily price reached $131 on September 15. In its October outlook, the administration raised its estimate for the average in the fourth quarter of 2026 to $105 a barrel, up $14 from the previous month’s forecast. It also raised its expected 2026 average to $96 from $91, and its 2027 average to $84 from $74 in the previous estimate. The administration’s assessment aligns with UBS’s in keeping prices at elevated levels in the near term, while the time frames differ between an annual average and the bank’s forecasts for specific points at year-end and during 2027. The EIA’s annual estimate for 2027 remains below its forecast for 2026.

The Energy Information Administration estimated that global inventories fell by an average of 1.9 million barrels a day in the third quarter of 2026, and forecast a further decline averaging 0.7 million barrels a day in the fourth quarter. The administration said tanker rates reached record levels in September, reflecting higher insurance costs, while longer routes to avoid conflict zones reduced the number of vessels available. These factors link maritime transit risks with the cost of delivering oil to buyers, alongside shrinking inventories. In its outlook, the administration assumed that most regional production would return to pre-conflict averages by the end of the second quarter of 2027. On that path, it forecast Brent averaging $87 in the second quarter of 2027 and $74 in the fourth quarter; its next Short-Term Energy Outlook is scheduled for release on November 10, 2026.