Rabobank’s RaboResearch Team has increased its 2026 forecast for Brent crude oil to $64 per barrel from $58.25. The expectation for West Texas Intermediate (WTI) has been adjusted to $59.80 per barrel, up from $54.60.
Geopolitical tensions, especially related to Iran, are affecting crude oil prices and the energy market. Analysts suggest caution when hedging refined products until crude prices decrease and inventories grow. The delay in OPEC’s supply return and the potential impact of rising metals prices on the economy are also being monitored.
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We are now working with a raised forecast for Brent crude to average $64 a barrel for 2026. This change is driven primarily by ongoing geopolitical risks, especially those involving Iran. The new WTI forecast has also been lifted to nearly $60 a barrel.
Recent tensions in key shipping lanes have added a risk premium, pushing front-month WTI futures to trade above $62 this week. Last week’s Energy Information Administration report confirmed this tightness, showing a surprise draw in crude stocks of 1.2 million barrels when a build was expected. This reinforces the idea that the market remains undersupplied for now.
We see OPEC+ continuing to delay any significant supply increases for 2026. This view was supported by statements from key member nations last week, which signaled an intention to hold production steady through the second quarter. Looking back, this continues the cautious supply stance they adopted throughout most of 2025.
Market Strategies and Economic Slowdown
Given this outlook, we remain careful about hedging refined products like gasoline and diesel. Until we see a clear trend of crude prices falling and inventories starting to build, entering new long-term hedges feels premature. The current market volatility makes short-term options strategies more suitable for managing immediate risk.
A potential widespread economic slowdown, fueled by surging metals prices, also needs to be watched closely. We observed how record-high copper prices in late 2025 began to soften global manufacturing data from the Q4 earnings season. A similar pattern this year could eventually cap oil demand, but we are not seeing definitive signs of that yet.
