S&P Global has increased its oil price assumptions for both West Texas Intermediate and Brent crude for the rest of 2026. The estimate has been raised by $15 per barrel, showing expectations of stronger and more persistent price pressure.
For 2027, S&P has also revised its assumptions upward, but by a smaller margin of $5 per barrel. This suggests that while prices may stabilize slightly, they are still expected to remain elevated compared to earlier forecasts.
However, S&P has kept its long term outlook unchanged. Price assumptions for 2028 and beyond remain the same, indicating that the current pressures are seen as medium term rather than permanent structural shifts.
According to S&P, oil prices may need to rise further or stay high for a longer period to reduce demand and bring the market back into balance. This reflects concerns that current supply demand dynamics are still tight.
The upward revision in prices is mainly due to ongoing supply disruptions and higher geopolitical risk premiums. A key factor is the continued deadlock in US Iran peace talks, which is adding uncertainty to global oil supply.
S&P also highlighted that even if the Strait of Hormuz fully reopens, oil supply recovery will not be immediate. Instead, flows are expected to return gradually over time.
Geopolitical risks are expected to remain elevated through 2027. This means markets could continue to face volatility and uncertainty for an extended period.
Finally, S&P warned that any reopening of the Strait of Hormuz could be fragile. Oil flows may face intermittent disruptions, making supply conditions unstable even if access is restored.
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