Crude Oil Price Forecast 2026–2027

From Bearish Consensus to Geopolitical Shock

In early 2026, the consensus on crude oil was decisively bearish. The EIA projected Brent averaging $57.69 per barrel for the year. Goldman Sachs cited a 2.3 million barrel per day global surplus. J.P. Morgan held a $60 per barrel full-year deck. Within 25 days, that consensus was shattered.

On February 28, 2026, the United States and Israel launched joint air strikes on Iran’s nuclear and military infrastructure, triggering Iran’s immediate closure of the Strait of Hormuz and the largest geopolitical energy shock since 1973.

By March 9, Brent futures hit an intraday high of $119.50 per barrel. The IEA’s March 2026 Oil Market Report estimated that crude and product flows through the Strait had fallen from approximately 20 million barrels per day to near-zero, with Gulf producers shutting in at least 8 million barrels per day of crude and a further 2 million barrels per day of condensates and NGLs. Iraq and Kuwait storage was approaching capacity, triggering force majeure declarations. Iran’s new Supreme Leader, Mojtaba Khamenei, vowed to keep the Strait closed, and AJC views a swift resolution as the low-probability scenario.

Key Supply Disruption Metrics

The Strait of Hormuz has been effectively closed to commercial tanker traffic since March 2, with approximately 20 million barrels per day of crude and products normally transiting the route. Gulf crude production has been curtailed by at least 8 million barrels per day according to the IEA’s March 10 assessment, with an additional 2 million barrels per day of condensates and NGLs shut in. Iraq, Kuwait, Qatar, the UAE, and Saudi Arabia are all reporting major output reductions. More than 3 million barrels per day of regional refining capacity is offline, with a further 4 million barrels per day of export-oriented refining capacity at risk.

On the response side, the IEA has authorised an emergency stock release of 400 million barrels from OECD member reserves. OPEC+ agreed to add 206,000 barrels per day from April, though this is insufficient to offset the scale of the disruption. US shale production is forecast by the EIA at 13.6 million barrels per day for 2026, an increase of 0.5 million barrels per day.

AJC Scenario Analysis

AJC’s base case, assigned a 45% probability, models a 4–8 week effective closure of the Strait of Hormuz followed by a gradual, partial resumption. Under this scenario, Brent is forecast to peak at $105–$110 per barrel in April–May 2026, with a Q2 average of $95–$100 per barrel and a Q4 landing of $72–$78 per barrel.

The escalation scenario, assigned a 35% probability, models a 2–3 month prolonged disruption. Brent is forecast to peak at $130–$135 per barrel, with a Q2 average of $110–$120 per barrel and a Q4 landing of $80–$90 per barrel.

The swift resolution scenario, assigned only a 20% probability given Iran’s stated posture, assumes a ceasefire and Hormuz reopening within 3 weeks. Under this scenario, Brent would peak at $88–$93 per barrel, with a Q2 average of $70–$75 per barrel and a Q4 landing of $60–$65 per barrel.

The pre-conflict consensus with the EIA projecting $57–$65 per barrel and Goldman Sachs at $76 for Q2 is now considered obsolete by AJC.

Why AJC Diverges from Street Consensus?

Most institutional forecasts assume a relatively swift resumption of Hormuz traffic. AJC’s field intelligence and geopolitical reading assigns a much lower probability to this outcome. Iran’s new leadership has clear incentive to maintain the blockade as leverage. Additionally, well and refinery shut-ins in Qatar, Iraq and Kuwait, once declared force majeure, cannot be restarted instantaneously, meaning structural supply tightness persists well beyond any ceasefire. AJC’s $105–$110 peak call is therefore not a tactical spike forecast; it is a conviction-grade fundamental view with a 4–6 week holding period.

Quarterly Forecast Timeline

In Q1 2026 (January–March), Brent has moved from $71 to $104 per barrel, driven by the Hormuz closure and war premium. The supply risk is critical, and AJC’s bias is strongly bullish. WTI has tracked a similar range of $68–$102 per barrel.

For Q2 2026 (April–June), AJC forecasts Brent in the range of $95–$110 per barrel and WTI at $93–$107 per barrel, with the key driver being the tension between partial Hormuz resumption and the shut-in cascade. Supply risk remains high and AJC’s bias is bullish.

In Q3 2026 (July–September), Brent is expected to moderate to $78–$90 per barrel as SPR releases and US shale ramp-up take effect. Supply risk is medium and AJC’s bias shifts to neutral-bearish.

By Q4 2026 (October–December), Brent is forecast at $68–$78 per barrel as surplus rebuilds and OPEC+ hikes take hold. AJC’s bias is bearish.

For full-year 2026, AJC estimates Brent averaging approximately $90 per barrel and WTI at approximately $85 per barrel, with volatility as the dominant feature. For FY 2027, as the structural surplus resumes, AJC forecasts Brent averaging $60–$68 per barrel and WTI at $57–$65 per barrel.

Key Event Timeline

In January 2026, the market was dominated by the oversupply narrative, with Brent at $68 per barrel. Through February, US-Iran tensions built, pushing Brent to $71 per barrel. On February 28, US-Israel strikes on Iran caused an immediate repricing from $71 to $94 per barrel. By March 9, with the Hormuz effectively closed, Brent reached $104 per barrel. AJC’s near-term call places the peak at $105–$110 per barrel in April 2026. A partial Hormuz resumption is expected around June, bringing Brent to approximately $90 per barrel. SPR releases and the shale ramp are expected to bring relief by August, with Brent around $80 per barrel. By Q4 2026, the market is expected to be normalising at $70–$75 per barrel, and by 2027, a structural surplus should return Brent to $60–$65 per barrel.

Geopolitical Risk Watch: Key Triggers

AJC monitors five key trigger events for their impact on crude pricing. A ceasefire with Hormuz reopened within three weeks (20% probability) would result in a $20–$30 per barrel decline, signalling a bearish cover-positions environment. A partial resumption of Hormuz with selective tanker passage (35% probability) would sustain prices in the $90–$100 range, with a neutral hold signal. A direct attack on Saudi or Iraqi infrastructure (20% probability) would add $20–$30 per barrel, representing an extreme bullish signal. US midterm political pressure forcing rapid de-escalation (15% probability) would result in a $15–$25 per barrel decline, signalling a partial exit. Finally, China and India securing alternative supply routes (10% probability) would provide demand-side relief of up to $10 per barrel.

Disclaimer: This report is published by Ajay Joshi Chemicals for information purposes only. The forecasts and scenarios contained herein represent AJC’s analytical view as of March 14, 2026, and are subject to change without notice. This document does not constitute investment advice, financial advice, or a solicitation to buy or sell any commodity, security, or financial instrument. Price forecasts involve significant uncertainty; actual outcomes may differ materially from those described. AJC accepts no liability for any loss arising from reliance on this material. This document is confidential and intended solely for the authorised recipient. Reproduction or redistribution without AJC’s written consent is prohibited. © Ajay Joshi Chemicals 2026. All rights reserved.