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Rabobank’s Joe DeLaura details how renewed United States (US)–Iran tensions and disruptions at the Strait of Hormuz have driven a sharp rally and subsequent correction in Brent and West Texas Intermediate (WTI). He expects Brent to oscillate within a wide range, with geopolitical headlines around Hormuz and Bab al-Mandab dictating moves. Rabobank also raises its Brent and WTI forecasts for late 2026 and 2027.
Geopolitics drive wide crude ranges
“As of this publishing, Brent is near $81 and WTI $76.30/bbl. We expect Brent to trade in a volatile range between $70-75 as our targeted support points on the low end and $95-$100 as the upper bounds. Increased transits through the Strait of Hormuz and the Bab al-Mandab and peace deal rumors will push prices lower, while fresh escalation and consistent attacks on shipping will push crude to the upper end of this range.”
“We believe that a short-term deal to open up the Strait of Hormuz for commercial shipping is unlikely as both sides have very little common ground. It offers no permanent solutions for the key sticking points that the whole conflict centers around! Instead, it offers another 60-day window of free transits through Hormuz while further negotiations resume.”
“If a deal is agreed, it could be a matter of time until either party expresses frustration with the negotiations again and markets are forced to price in another few weeks of geopolitical tension.”
“The world is still drawing down about 2-5 mb/d per day depending if we see another call for SPR releases, and another 5-6 mb/d of refined products. The savings account of inventories won’t last forever.”
“Our current view is that Hormuz could only return to 50-60% of prewar flows (including diversions to Yanbu/Fujairah) by 2027 but Middle East refinery exports are assumed back to normal only by middle of 2028. This is large gulf between oil and products.”
“Forecast Changes: Brent Q3 2026 ↑ to $84/bbl, Q4 2026 ↑ to $80/bbl, 2027 ↑ to $76.50. WTI Q3 2026 ↑ to $80.50/bbl, Q4 2026 ↑ to $76/bbl, 2027 ↑ to $72.25/bbl.
