Oil Prices Likely To Average $113 A Barrel In Q2 2026, Say Analysts

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Oil prices are expected to average around $113 a barrel in the second quarter of 2026, as a global think tank has raised its forecasts due to the ongoing military conflict in the Middle East and the closure of the Strait of Hormuz.

“We've raised our oil and natural gas price forecasts in anticipation of a more prolonged conflict in the Middle East and a slower return to normal levels of energy production in the region and traffic through the Strait of Hormuz. We forecast that the Brent oil price will average $113 per barrel in the second quarter of 2026 and converge to the pre-crisis anticipated path by 2028,” said Ben May, director of global macro research at Oxford Economics.

Oil prices have been rallying since the Middle East war involving the US, Israel, and Iran broke out on February 28, pushing crude prices up by more than 50 per cent to date.

Brent closed at $112.19 per barrel over the weekend, compared to $72.87 a barrel on February 27, up nearly 54 per cent, or $39.32, in three weeks.

May and other analysts believe that the longer the Strait of Hormuz—which sees around 20 million barrels a day passing through it—remains closed, the bigger the likely logistical challenge it will be for supply chains to return to normal. It won't be as simple as flicking a switch to restore production and shipping.

Oil prices calmed on Friday after the US asked Israel to avoid targeting Iranian energy infrastructure.

On Sunday, US President Donald Trump gave a 48-hour ultimatum to Iran to fully reopen the Strait of Hormuz; otherwise, he would order the obliteration of Iran's power plants.

In response, Iran's Khatam Al Anbiya military command headquarters said that if the US attacks its fuel and energy infrastructure, then Tehran would target all US energy, information technology, and desalination infrastructure in the region.

Iran said on Sunday that it would allow only non-enemy countries' ships to sail through the Strait.

Li Xing, a financial markets strategy consultant at Exness, said new disruptions affecting energy infrastructure in the region could continue to fuel fears of shortages on a global scale, although calls to spare energy sites could support hopes of lower tensions.

“Shipping traffic through the Strait of Hormuz has remained largely at a standstill, keeping the region's energy exports constrained and increasing uncertainty in the market. Traders are likely to remain highly attentive to any developments aimed at securing transit through the waterway, after failed plans to build a coalition to conduct military escorts,” she added.

Xing said efforts to release additional volumes from strategic reserves by International Energy Agency members could help limit the pace of the recent surge in prices in the short term.

“However, the impact of these measures may remain limited if supply disruptions persist or geopolitical risks intensify. As a result, oil prices could remain volatile and highly reactive to developments in the Middle East. Any signs of de-escalation may weigh on prices, while renewed threats to energy infrastructure in the region could trigger further upside pressure,” she added.

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