On May 1, Barclays raised its forecast for Brent crude in 2026 to $100 a barrel, citing market developments tied to the flow of oil through the Strait of Hormuz and accelerating draws on inventories. The bank said that if disruptions in the strait continue for an extended period, the resulting price shock would grow larger and more persistent - a dynamic that would further tighten global oil balances.
Barclays reported that oil transiting the Strait of Hormuz has been reduced to a trickle while stockpiles are being drawn down at an accelerating rate. Based on current conditions, the bank estimated that the market is facing a deficit of roughly 6.6 million barrels per day and assessed that this shortfall is likely to widen going forward.
The note from Barclays also addressed the potential implications of the United Arab Emirates' exit from OPEC. While the bank said the UAE stepping away from the group could help reduce the medium-term gap between non-OPEC supply and demand growth, it cautioned that such a move would be unlikely to fully close the deficit and would do so at the expense of global spare capacity.
Barclays set out a conditional scenario for further price moves. If the current disruption persists through the end of May, the bank said forward-implied 2026 Brent prices could reprice as high as $110 a barrel.
Market moves on the day reflected mixed signals. Crude futures fell after Iran put forward a proposal to negotiate with the United States, but prices were still poised for weekly gains amid the continued blocking of the Strait of Hormuz by Tehran and the U.S. Navy's ongoing blockade of Iranian crude exports. On the day, Brent crude futures for July settled at $108.17, while West Texas Intermediate futures finished at $101.94 a barrel.
Market implications and context
The Barclays assessment makes clear that immediate physical constraints on flows through a key chokepoint are the primary driver behind its upward revision to the 2026 Brent forecast. That combination of constrained flows and fast-eroding inventories underpins the bank's conclusion that the market deficit - already estimated at 6.6 million barrels per day - is likely to expand unless flows are restored.
Barclays' view on the UAE's exit from OPEC highlights a secondary channel through which supply-side dynamics could adjust over the medium term. The bank said the UAE leaving OPEC might narrow the gap between non-OPEC supply and demand growth, but noted that any narrowing would not fully eliminate the imbalance and would reduce available spare capacity in the system.
Key points
- Barclays raised its 2026 Brent price forecast to $100 a barrel and warned prices could rise further if disruptions in the Strait of Hormuz persist - sectors affected include oil producers, energy-intensive industries, and commodity markets.
- The bank estimates a current market deficit of 6.6 million barrels per day, with inventory draws accelerating and the shortfall likely to widen - implications for refinery margins and crude trading are material.
- If disruptions continue through the end of May, Barclays said forward-implied 2026 Brent could reprice to $110 a barrel - a development that would affect currency-sensitive economies and corporate energy costs.
Risks and uncertainties
- Duration of Strait of Hormuz disruptions - continued blockage would deepen the market deficit and push prices higher, increasing volatility for energy markets and downstream consumers.
- Impact of the UAE's exit from OPEC - while it could narrow the medium-term supply-demand gap, Barclays said it would not fully close it and would reduce spare capacity, leaving markets more exposed to shocks.
- Geopolitical developments and negotiations - price reactions have already shown sensitivity to diplomatic moves, as futures fell after Iran offered negotiations with the U.S., even as physical blockages and naval actions persisted.
Market snapshot
On the day Barclays published the note, Brent for July delivery settled at $108.17 a barrel and WTI settled at $101.94 a barrel. The bank’s conditional scenario for a further rise to $110 a barrel by way of forward-implied 2026 pricing depends explicitly on whether current disruptions last through the end of May.
This article reports Barclays’ publicly stated forecasts and assessments as disclosed on May 1 and does not add analysis or projections beyond those contained in the bank’s note.