UBS raises Brent 2026 year-end target to $110 a barrel
UBS lifted its Brent crude outlook for a second time this month, now pointing to $110 a barrel by the close of 2026 instead of $100, citing persistent tightness across Gulf supply.
The Swiss lender also pushed its entire 2027 price path up by $5 a barrel across the board, now penciling in $95 for March, $90 for June and $85 for September. Earlier this month the bank had already revised its fourth-quarter estimate up to roughly $100 from near $80 and nudged its 2026 average projection higher as well.
UBS flagged persistent uncertainty linked to the conflict in the Middle East and to the inconsistent pace at which both Gulf crude output and worldwide demand are normalizing. Although Middle Eastern crude cargo volumes have bounced back from the sharp disruptions seen earlier in the year, shipments of crude and condensate loaded from Gulf ports still trail pre-war volumes.
Maritime risk has escalated too: this month brought the highest tally on record of attacks reported against tankers operating near the Strait of Hormuz, which has driven up both insurance premiums and freight charges. Charter rates for very large crude carriers moving from the Gulf toward China have surged to $30-40 per barrel, a sharp jump from roughly $1 to $3 typically seen over the prior ten years.
Worldwide crude stockpiles have dropped significantly, and nearly all of the previously announced releases from strategic reserves have already been carried out. UBS noted that a market running a supply deficit could pull commercial inventories down further still, lending ongoing support to prices.
Midweek trading saw Brent change hands near $115.30 per barrel, a gain of 1.25%, while WTI climbed to around $101.90, up 2%, following a Houthi claim of having struck Saudi Aramco’s Ras Tanura refinery with a missile; Saudi officials have yet to confirm the facility was actually hit. Reports indicate Washington has advised Gulf governments to brace for the possibility of a fresh US military operation targeting Iran once the November 3 midterm elections have passed, even as mediators from Qatar have handed Tehran an updated proposal aimed at ending the conflict.
In a separate development, the World Bank projected global commodity prices would climb 23% this year, attributing the increase to elevated energy costs, shipping interruptions tied to the Middle East, difficulties moving grain through the Black Sea, and heightened appetite for safe-haven assets such as gold.
Why it matters for markets: A sustained climb in Brent and WTI crude influences energy-sensitive currencies including the Canadian dollar and Norwegian krone, raises input costs across transport and manufacturing industries, and shapes inflation expectations that feed into central bank policy decisions. Rising Gulf shipping risk and shrinking global inventories also tend to boost demand for gold as a haven asset.
Source: OilPrice.com