May 1 - Barclays on Friday lifted its Brent crude forecast for 2026 to $100 per barrel, up from a prior projection of $85, attributing the revision to the continued impasse in the Strait of Hormuz.
The bank noted that an Iranian proposal on negotiations with the U.S. applied downward pressure to Brent futures on Friday, even as prices finished the week higher overall. Barclays emphasised that Tehran remains in a position that blocks passage through the strait while the U.S. Navy continues to block exports of Iranian crude.
According to Barclays, the current situation has produced a fragile ceasefire that is largely holding, but rhetoric around the region remains elevated and actual flows through the strait have been reduced to a trickle. Those constrained movements are coinciding with accelerating global inventory draws that the bank says have already offset most of last year’s U.S. stock builds.
Barclays estimated that the oil market is operating with a deficit on the order of around 6.6 million barrels per day. The bank warned this shortfall is likely to widen as the supply shock continues.
Barclays also cautioned that the longer the disruption persists, the larger and more persistent the resulting price shock will be. The bank stressed that the $100 per barrel forecast should not be interpreted as a new equilibrium between supply and demand.
On policy developments, Barclays said the United Arab Emirates’ planned exit from OPEC could help narrow the medium-term gap between non-OPEC supply growth and demand, but that this move is unlikely to fully close the gap and would, in Barclays' view, reduce spare capacity.
In market signals, Barclays noted forward-implied average Brent prices for 2026 were near $94 a barrel, a level below what would be implied under a scenario where the strait had normalised by the end of April. The bank added that if disruptions continue through the end of May, market prices could reprice toward $110 a barrel.
Contextual note: Barclays presents these assessments as scenario-based outcomes linked directly to the duration and persistence of the disruption in the Strait of Hormuz.