Oil prices are anticipated to stay high through the fourth quarter of 2026, with Brent crude possibly reaching $95 to $100 per barrel by the end of the year. Hong Leong Investment Bank Bhd (HLIB) raised its 2026 price assumption for Brent to $90 per barrel from $80, citing growing global supply deficits and increased risks to oil flows through critical Middle Eastern chokepoints. HLIB maintains an "Overweight" rating on the oil and gas sector.
Brent crude surpassed $100 a barrel on September 10, 2026, driven by escalating Middle East tensions that sparked concerns about simultaneous disruptions at the Strait of Hormuz and Bab el-Mandeb. These risks are materializing, including severe disruptions to Strait of Hormuz traffic, rising threats in Bab el-Mandeb, and attacks on regional energy infrastructure. Saudi Arabia's 1,200-kilometer East-West Pipeline, an alternative route to bypass the Strait of Hormuz, was temporarily shut down following drone attacks. This pipeline has a total capacity of 7 million barrels per day (bpd), with 5 million bpd available for exports.
The disruption of the East-West Pipeline raised concerns about alternative crude export routes, as exports from Yanbu fell to a six-month low of 1.43 million bpd from 3.9 million bpd in the preceding three months. Traffic through the Strait of Hormuz has collapsed to below 10 percent of pre-war levels between July and September 2026. Goldman Sachs also predicted that oil prices could remain above $100 through the end of 2026 if oil flows do not normalize soon, with some scenarios projecting Brent could hit over $140 a barrel in the coming months.
Further compounding price pressures, oil rose as Iran stated it would not ease its conditions to reopen the Strait of Hormuz after President Donald Trump rejected a proposal. Brent advanced to around $107 a barrel, while West Texas Intermediate climbed above $94. Trump mentioned negotiations are expected to resume, but DBS Bank Ltd.'s head of energy research, Suvro Sarkar, noted the market wasn't expecting a quick reopening. This ongoing geopolitical tension and supply constraint contribute to inflationary pressures, with Brent up about 75% this year.
