- Macquarie Group has significantly lowered its Brent crude oil price forecasts for 2026 and 2027, primarily due to the faster-than-expected normalization of oil export flows from the Middle East.
- With the temporary peace agreement between the United States and Iran, oil exports from the Persian Gulf are gradually resuming, leading to a revaluation of the global crude oil market's supply and demand fundamentals.
- Although the complete normalization of supply chains still faces obstacles such as geopolitical uncertainties, Macquarie expects the rebuilding demand for commercial and strategic inventories to provide a bottom support for oil prices in the medium to long term.
Faster-than-expected Supply Recovery
The latest research report by Macquarie strategists Peter Taylor and Vikas Dwivedi indicates that the market has severely underestimated the speed of supply recovery in the Middle East and the oil market's self-correcting ability. The bank has sharply lowered its average Brent crude price forecast for 2026 from $89 per barrel to $77 per barrel; similarly, the 2027 average price outlook has been reduced from $74 per barrel to $64 per barrel. This adjustment reflects the quicker-than-anticipated return of mainstream international oil supply channels as geopolitical tensions ease.
Infrastructure and Inventory Buffer
The report's analysis suggests that Middle Eastern oil-producing countries possess deep expertise in oil production, ample storage tank capacity, and advancements in oil field rotation science, enabling the supply to return to the market faster than widely expected. Before the outbreak of conflict, the global oil market was already in a state of oversupply. The demand destruction and potential hidden inventory drawdown triggered by the conflict have actually helped fill the previously lost supply gap. This is a major reason why international oil prices have remained relatively low despite experiencing historically significant shocks.
Short-term Volatility and Long-term Support
Although the long-term trend leans towards abundant supply, Macquarie points out that due to shipowners' cautious attitude when crossing former war zones and sensitive sea areas, international oil prices are expected to remain volatile at high levels in the coming months. However, over a longer cycle, the rigid demand from major global consumers to rebuild commercial and strategic oil inventories will intervene during deep price corrections, providing some support to the far-end forward curve and preventing prices from plummeting.
