UBS has raised its Brent crude oil price forecast for the second time in October, projecting that the international benchmark will reach $110 per barrel by the end of 2026, up from its previous forecast of $100, as persistent supply disruptions in the Gulf region tighten global oil market fundamentals.
As at the time of writing 4:30 a.m. (WAT), Brent crude traded at $114.2 per barrel, down 0.99 per cent, while West Texas Intermediate (WTI) fell 1.28 per cent to $101.5 per barrel. The price movements reflect continuing volatility as traders assess supply risks and prospects for diplomatic progress in the Middle East.
According to Oilprice.com, UBS also raised its 2027 Brent price projections by $5 per barrel across three quarterly benchmarks, forecasting $95 per barrel in March, $90 in June and $85 in September. The Swiss bank cautioned that uncertainty remains elevated because of the unpredictable Middle East conflict, the pace of recovery in Gulf oil production and the outlook for global demand.
Although Middle Eastern crude loadings have recovered significantly from earlier disruptions, crude oil and condensate shipments from Gulf ports remain below pre-conflict levels. Reported attacks on vessels around the Strait of Hormuz have further increased shipping and insurance costs. Very large crude carrier freight rates on the Middle East-to-China route have reportedly surged to $30–$40 per barrel, compared with $1–$3 per barrel over the previous decade.
UBS warned that declining global inventories and the diminishing impact of previously announced strategic reserve releases could sustain elevated prices. The bank said an undersupplied market could further deplete commercial stocks, increasing the risk of additional price pressure if supply disruptions persist or demand proves stronger than anticipated.
Geopolitical tensions are adding to market uncertainty. The supplied report cited a claimed Houthi missile attack targeting Saudi Arabia’s Ras Tanura refinery, which has a reported processing capacity of 550,000 barrels per day. Saudi authorities had not confirmed a direct hit, while a Saudi-led coalition said it intercepted a missile aimed at Taif. Meanwhile, reports of a possible resumption of US military action against Iran after the November 3 midterm elections have heightened concerns about further disruption to regional oil supplies.
For Nigeria’s oil and gas industry, sustained high crude prices could support export earnings and government revenue, provided production volumes are maintained. However, elevated freight and insurance costs, alongside volatility in international petroleum markets, could increase the cost of imported refined products and complicate downstream pricing. Although expanding domestic refining capacity offers an important buffer, local operators remain exposed to international crude benchmarks and broader market conditions.
The Swiss bank revised forecast underscores the importance of developments in the Gulf to the global oil price outlook. While a recovery in disrupted production and shipping could ease prices over time, continued export constraints, declining inventories and further military escalation could keep crude markets elevated and volatile into 2027.