Hi everyone, I'm trying to understand the medium-term supply/demand outlook for crude oil prices once the current geopolitical tensions in Middle East ease and it's eventual effect on Global GDP numbers.
Right now, it seems a large portion of the oil rally is being driven by geopolitical risk premium, especially around the Strait of Hormuz and Middle East supply concerns. Brent is currently trading above $100.
But assuming: ceasefire eventually holds and global growth remains moderate, Where do you think crude prices settle over the next 6-12 months?
Some interesting forecasts I found:-
The EIA Short-Term Energy Outlook: Brent could fall below $90 by late 2026 if supply disruptions ease, while averaging around $76 in 2027.
J.P. Morgan Global Research has a more bearish longer-term outlook and expects Brent to average around $60 in 2026 due to soft supply-demand fundamentals and abundant supply growth.
Goldman Sachs commodity outlook still sees elevated prices if geopolitical risks persist, with Brent around the low $80s under their base case.
At the same time, there are bearish arguments: weaker China demand, EV adoption, non-OPEC supply growth.
But bullish arguments remain: underinvestment in upstream, OPEC discipline, geopolitical fragmentation, inflationary commodity cycles, delayed restoration of existing oil production facilities in the Middle East.
Curious what you guyz think: Once the war premium fades, does Brent realistically return to the $60 – 70 range? Or are we entering a structurally higher oil-price era due to geopolitics and deglobalization?
GDP Growth Impact: Given that high oil prices and supply disruptions currently acting as a drag on the global economy with Fitch warning that sustained $100 oil could shave 0.4% to 0.8% off global GDP. How does the eventual demand destruction from these high prices affect the valuation baseline?
Would love to hear views from people following physical markets, tanker flows, OPEC policy or into macro research.
Posted by Faris_110
3 Comments
Oil is back to $60 by December. Oil drops to $80 on tweets. None of this is real and the market is so heavily manipulated that people are losing a lot of money trying to predict with fundamentals. Demand destruction doesn’t exist for oil outside of shithole countries, it’s a fancy new buzzword that people discovered 3 months ago.
So if you’re worried about money just buy calls on everything besides oil.
It’s not the price that matters. It’s the quantity. We have lost 5% of energy production. If that continues, global GDP will shrink by 5%. Without adequate energy, production will have to be reduced and supply chains will break.
I see lower prices, but only due to demand destruction