Economists and oil market analysts have hiked their oil price forecasts for 2026 amid rising geopolitical tensions and heightened war premium due to the U.S.-Iran standoff.
Both crude oil benchmarks are now expected to average above $60 per barrel this year, with price forecasts higher by about $1.50 per barrel compared to a month ago, the monthly Reuters poll showed on Friday.
Despite ongoing concerns about an oversupplied market, the 34 analysts and economists surveyed by Reuters in February raised their projections in view of uncertainties in how the Iran crisis would unfold in the coming weeks and months.
In the February poll, Brent Crude prices are expected to average $63.85 per barrel in 2026. This month’s estimate is higher compared to the January forecast of $62.02.
The analysts in the poll expect the U.S. benchmark, WTI Crude, to average above $60 per barrel this year, too—at $60.38 a barrel, up from $58.72 expected in January.
Year to date, Brent price have averaged $70.48 per barrel and WTI – $65.01 a barrel.
Early on Friday, both benchmarks were trading 3% higher, with Brent near $73 and WTI at $67, after the United States and Iran adjourned the Thursday talks with plans for another round of negotiations next week.
Oman’s Foreign Minister, Badr Albusaidi, who was mediating the indirect talks in Geneva, said the parties had made “significant progress” in the nuclear talks. Next week, negotiations are set to be held in Vienna, Austria.
It is the ongoing U.S.-Iran standoff that has been the main driver of oil analysts in the Reuters poll to raise their oil price forecasts for this year.
Currently, the geopolitical risk premium already baked in the price of oil is about $4-$10 per barrel, analysts say.
The war premium, the OPEC+ supply policy, and the fundamentals in supply-demand balances will steer the direction of oil prices this year, they note.
By Michael Kern for Oilprice.com
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