Barclays, a prominent financial institution, is holding its 2026 average Brent crude oil price forecast steady at US$100 a barrel, despite acknowledging that risks are skewing higher. The bank communicated this outlook in a note released on Friday. On the same day, Brent crude futures were trading at approximately US$105 a barrel. This elevated price point reflected investor apprehension regarding the prospects of a breakthrough in US-Iran peace talks, alongside the ongoing closure of the crucial Strait of Hormuz.
The Strait of Hormuz has historically been a vital artery for global energy markets, with around 20 per cent of worldwide energy supplies transiting through it before the conflict. The ongoing hostilities have significantly curtailed oil availability, removing an estimated 14 million barrels per day of oil, or 14 per cent of global supply, from key producers such as Saudi Arabia, Iraq, the United Arab Emirates, and Kuwait. This substantial supply disruption is exerting considerable pressure on market balances.
Barclays highlighted that inventory trends are currently signalling a significant 6-8 million barrels per day deficit, with US inventories nearing their lowest levels since 2020. The bank further noted that even in the optimistic scenario of a full reopening of the Strait of Hormuz today, the starting point for inventories would still be roughly 20 million barrels below the tightest levels seen in recent history. Concurrently, global demand for oil remains largely resilient. Barclays anticipates that any current weakness in end uses linked to industrial activity would likely recover strongly should supply normalise quickly.
