Analysts forecast Brent at $120: geopolitics and supply disruptions reshape the oil market map
The oil market is at a bifurcation point. Amid escalating tensions in the Middle East and real disruptions to supplies through the Strait of Hormuz, Brent could surge to $120 per barrel in the second half of the year. This would bring prices close to the historical peak of $126.41, recorded at the end of April during the peak of the Iran-US conflict.
The key driver is a sharp reduction in export volumes from the Persian Gulf. Current shipments have fallen by more than 55% compared to pre-war levels. This is not just statistics but a direct blow to global supply. The closure of the Strait of Hormuz, or even its partial blockade, creates a deficit that the market cannot compensate for instantly.
Baseline scenario: a world without war
However, it is worth understanding: the $120 forecast is a stress scenario. Analysts' baseline view suggests that Brent will remain at $80 in the fourth quarter and decline to $75 by 2027 — assuming de-escalation. On July 19, amid news of a possible truce, prices already retreated from $90 to $88.47. The market clearly reacts to signals of peace.
But risks are skewed to the upside. Beyond Hormuz, routes through the Red Sea are under threat, where Houthis continue to attack tankers from Saudi Arabia. This creates a second front of logistical problems.
Diesel and gas: hidden threats
Special attention should be paid to the diesel market. Analysts recommend long positions on the December 2026 — March 2027 spread in the European market. The reason is a deficit caused by problems at refineries in Russia and a high probability of rising gas prices due to the same Middle East conflict. This is a classic example where secondary effects could prove stronger than direct ones.
Expert opinion: The oil market is currently squeezed between two forces — a geopolitical premium and a fundamental slowdown in demand (especially from China). I believe that $120 is a realistic target for a short-term rally, but sustained growth above this level is unlikely without a new shock. Investors should hedge risks through positions in diesel and closely monitor diplomatic signals.