Barclays is keeping its average Brent crude forecast for 2026 unchanged at $100 a barrel, while noting that the risks to that baseline are tilted toward higher prices, according to a bank note released on Friday.
On the same day of the note, Brent futures were trading at about $105 a barrel as market participants questioned the likelihood of a breakthrough in U.S.-Iran peace negotiations and the Strait of Hormuz remained closed. The bank observed that these conditions have intensified concerns about physical oil availability.
Prior to the outbreak of the conflict, roughly 20% of global energy volumes transited the Strait of Hormuz. The current hostilities have removed around 14 million barrels per day from the market - equivalent to 14% of global supply - originating from producers such as Saudi Arabia, Iraq, the United Arab Emirates and Kuwait.
Barclays pointed to inventory developments as a key signal of market tightness. The bank's analysis indicates a structural deficit on the order of 6-8 million barrels per day, with U.S. stockpiles approaching their lowest levels since 2020.
Importantly, Barclays stressed that even a full reopening of the Strait of Hormuz today would not immediately erase the imbalance. In the bank's most optimistic scenario, starting inventory levels would still be about 20 million barrels below the tightest recent historical level.
The firm also noted demand dynamics. Overall consumption remains largely resilient, and any near-term weakness in end uses tied to industrial activity is expected to rebound sharply if supply conditions normalize quickly. That resilience in demand is a factor supporting the upside skew to its forecast.
Context for markets and industry
- Energy markets face immediate stress from the production and transport disruptions cited by Barclays.
- Shipping and chokepoint security are central variables while the Strait of Hormuz is closed.
- Industrial sectors tied to oil demand could see temporary softening in activity, but Barclays expects a recovery if supply is restored.
Analytical note
Barclays' view combines observed low inventory levels with ongoing supply disruptions and continued demand strength to justify maintaining a $100 per barrel 2026 Brent average while acknowledging that the balance of risk favors higher prices.