Oil price on the rise?
Oil price on the rise? klsescreener.com
Source: klsescreener.com · The Star · October 6, 2026 at 10:02 AM · AI-assisted report
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KUALA LUMPUR, 6 OCTOBER 2026 —
Brent crude oil prices are expected to remain above US$100 a barrel and climb further if the United States and Iran remain locked in a standoff that leaves the Strait of Hormuz as a major fault line for global oil supplies, according to BMI Research, a unit of Fitch Solutions, which raised its Brent forecasts after pushing back its expectation for a preliminary US-Iran deal and an easing of Hormuz disruption to early 2027.
Market Impact
The revised outlook signals a prolonged period of elevated energy costs for importing nations across Asia, where governments have been cushioning consumers from higher fuel prices even as refiners continue to demand significant volumes of crude, compounding price pressures in downstream fuel markets already strained by conflict-related supply disruptions stemming from both the US-Iran confrontation and the Russia-Ukraine war.
BMI Research now expects Brent futures to average US$107 per barrel in the fourth quarter of 2026 and US$112 in the first quarter of 2027, as rising crude demand and continued constraints on the supply side combine to erode physical market buffers, leaving Brent increasingly exposed to renewed bouts of geopolitical escalation and unplanned production outages, the research unit said in a note.
"This assumes that rising demand for crude and continued constraints on the supply side combine to erode physical market buffers, leaving Brent increasingly exposed to renewed bouts of geopolitical escalation and unplanned production outages," BMI Research said, adding that although economic activity and end-user demand have been affected by the war, refiners continue to demand significant volumes of crude, with government measures to cushion consumers from higher energy costs limiting the decline in demand.
The front-month Brent contract fluctuated between US$100 and US$110 per barrel in September, reflecting the market's sensitivity to the shifting geopolitical landscape, while on the supply side BMI Research said spare production capacity outside the Middle East Gulf has largely been exhausted and the pipeline of greenfield projects due to come online in the coming months remains thin, reinforcing the tightness that underpins the elevated price trajectory.
In a separate assessment, Kenanga Research raised its Brent crude forecasts to US$91 per barrel for 2026 and US$85 for 2027 from previous estimates of US$80 for 2026 and US$74 for 2027, after taking into account the prolonged tension between the United States and Iran and the uncertainty of geopolitics in the Middle East.
"While near term resolution is unlikely, we do expect the United States and Iran to at least come to a partial deal in 2027, while negotiations for tougher issues (namely, nuclear) could still be ongoing beyond 2027," Kenanga Research said, noting that in 2027 it believes crude oil prices would still be lower year-on-year but it has attached a US$5 per barrel geopolitical premium to its forecast to account for lingering tensions in the Middle East even if a partial deal between the US and Iran is secured.
The divergence between the two research houses highlights the range of outcomes hinging on the trajectory of US-Iran diplomacy, with BMI Research's higher forecasts reflecting a later timeline for any preliminary agreement and a tighter physical market balance, while Kenanga Research anticipates an earlier partial deal but still prices in a persistent risk premium.
BMI Research noted that the outlook is expected to turn structurally bearish once a preliminary US-Iran deal is reached, though the source text does not specify the timing or terms of such an agreement beyond the early 2027 expectation for a preliminary deal and easing of Hormuz disruption.