Macquarie Group has significantly reduced its oil price forecasts for both 2026 and 2027. The investment bank now projects Brent crude to average $77 per barrel in 2026, a notable decrease from its prior estimate of $89 per barrel. Similarly, the forecast for 2027 has been cut to $64 per barrel from $74 per barrel. This downward revision is attributed to the expectation that crude supplies from the Persian Gulf will recover more rapidly than initially foreseen, following a temporary ceasefire agreement between the United States and Iran.
According to Macquarie strategists Peter Taylor and Vikas Dwivedi, regional oil producers are likely to resume production and exports at a pace that the market is currently underestimating. They assert that the market is substantially underestimating the speed of recovery and the oil market's inherent ability to self-correct. Factors such as the region's production expertise, existing storage capacity, and operational flexibility are expected to accelerate the return of supply, thereby mitigating earlier concerns about supply disruptions and subsequent high prices.
The bank also highlighted that the oil market was already experiencing an oversupply before the recent conflict. Softer global demand coupled with inventory drawdowns helped to absorb initial supply shocks, which limited the overall impact on prices. While near-term oil prices may remain volatile as shipping activities in the region gradually normalize, the longer-term outlook suggests that rebuilding commercial and strategic inventories could offer some support to prices, preventing a complete collapse. This shift in market dynamics supports the view of a potential oil glut rather than a shortage, especially as US-Iran deal hopes emerge bloomberg.com.
