Oil
Major banks lift oil price forecasts amid supply risks
Global financial institutions have revised their crude price projections upward as persistent Middle Eastern supply disruptions and tight inventories impact markets.
Key points
- UBS raised its December Brent forecast to $110 per barrel, while ANZ increased its target to $105.
- Goldman Sachs estimates that geopolitical supply risks account for approximately $27 per barrel of current prices.
- A Reuters survey indicated expectations for a global petroleum supply deficit of 2.7 million barrels per day late in 2026.
What happened
Major investment institutions are adjusting their crude oil projections upward through the end of 2026 and into 2027, according to reports from Oil & Gas 360 and Armenpress. The revisions follow ongoing concerns regarding Middle Eastern petroleum exports, transportation constraints, and tanker availability linked to regional conflicts.
UBS increased its December 2026 Brent crude estimate to $110 per barrel from a previous $100. Similarly, Australia and New Zealand Banking Group Limited (ANZ) raised its year-end Brent projection by $10 to $105 per barrel. Goldman Sachs maintained a more conservative stance, projecting Brent at $90 by year-end and averaging $80 through 2027, though it noted that risks remain skewed toward higher valuations.
According to Goldman Sachs, approximately $27 per barrel of the current price structure is attributable to geopolitical risk premiums. Meanwhile, a Reuters survey of 32 analysts raised the average 2026 Brent expectation to $92.88 per barrel, pointing to a potential global supply deficit of 2.7 million barrels per day in the final months of 2026.
Spot market data recorded Brent trading at $113.40 per barrel on the ICE Stock Exchange, while WTI reached $104.12 on the NYMEX, according to Armenpress. US Energy Information Administration figures from late October placed Brent spot prices even higher at $123.10 per barrel.
Why it matters
For energy markets and investors in Africa and globally, sustained crude price volatility presents a complex operational environment. While elevated prices can bolster upstream cash flows and improve producer balance sheets, they also introduce significant challenges for capital budgeting, refining operations, and transportation economics.
In Nigeria and across import-dependent African economies, higher global crude and refined product prices can increase the cost of imported fuels, impacting domestic inflation and foreign exchange reserves. With the naira reference rate standing at 1345.49 per US dollar, expensive petroleum imports place additional pressure on domestic energy pricing and macroeconomic stability.
Energy professionals must distinguish between short-term geopolitical risk premiums and structural supply-demand fundamentals. As global markets navigate inventory drawdowns and limited buffer capacity, policymakers and investors need to carefully weigh the short-term gains of high revenues against long-term demand destruction and market instability.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Crude benchmarks move budgets, currencies and inflation in producer and importer countries alike. For economies such as Nigeria, where fuels dominate exports, production and refining decisions move the whole economy.
9.5% of world merchandise exports were fuels in 2025Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
