Three major brokerages have raised their oil price outlooks as the Iran conflict disrupts flows through the Strait of Hormuz, tightening an already fragile global supply picture and pushing crude prices higher.

Swiss brokerage UBS said crude markets are “on edge” with tanker traffic severely constrained. “Limited progress to unlock the world’s most important energy chokepoint have
added to crude oil prices,” strategist Jon Gordon said in a report, with Brent trading as high as $102.6 at the time of writing on Tuesday.

UBS now expects Brent at $90 per barrel by end-June, before easing to $85 by end-September and end-December 2026, and $80 by end-March 2027. “On balance, we believe the path of least resistance for oil prices is now tilted further to the upside,” Gordon said, citing worsening supply disruptions and limited spare capacity.

Gordon highlighted that tanker loading activity in the Strait has “nearly ground to a halt,” while alternative export routes are operating close to capacity. He added that coordinated releases of around 400 million barrels from OECD reserves would only partially offset the supply shock, as the release pace falls short of potential production losses that could reach 10 million barrels per day.

The strategist also pointed to rising refined product prices, saying diesel, jet fuel and LPG could remain elevated and even outpace crude.

Gordon believes the combination of supply disruptions, limited support from reserves, and geopolitical risks means oil prices are likely to stay “higher for longer,” even if flows through the Strait resume in the coming weeks.

In this backdrop, gold remains “an effective portfolio diversifier and hedge,” he said, and continues to favor exposure to energy, gold, and other real assets within a broadly diversified portfolio.

In a separate note, Barclays also lifted its oil price forecasts, arguing the conflict is accelerating a tightening trend already underway. The bank raised its 2026 Brent forecast to $84 per barrel and now expects prices to “normalise at a higher level than pre conflict,” closer to $80 per barrel longer term rather than $70 previously.

“Short-term oversupply concerns have now been replaced by real physical outages that have materially tightened all supply / demand balance estimates, with inventory rebuilds needed after disruptions,” analysts led by Lydia Rainforth wrote.

Barclays estimates that around 8 million barrels per day of crude production has been shut in across the Middle East, alongside broader disruption to liquids and LNG flows. The bank also raised its refining margin assumptions by more than 110% to around $11 per barrel.

In the U.S., Mizuho increased its 2026 outlook for Brent and WTI by roughly 14% and 12%, respectively, to $73.25 and $68.25 per barrel. The broker said even a short period of disruption could materially tighten the market, noting that displaced supply reduces the expected 2026 oversupply and makes a return to lower price scenarios increasingly unlikely.

Even one month of displaced crude output, estimated at about 7.1 million barrels per day, would significantly reduce the expected oversupply in 2026, tightening the market balance, it said.

The probability of a sharp drop in prices toward the low-$50 range has become “negligible,” Mizuho noted, while a mid-year rebalancing could keep Brent in a $70–75 range. The key question remains whether the conflict leads to structurally higher long-term prices, noting that the bias is likely higher but it is “too early” to make that call, Mizuho said.
Source: Investing.com