Barclays keeps $100 Brent forecast as rivals slash oil outlooks after Iran deal

Barclays Keeps $100 Brent Forecast as Iran Deal Won’t Fix Oil Supply Fast

Barclays is standing by its $100-per-barrel Brent crude forecast for 2026, even as the global benchmark fell below $80 for the first time since the Iran war began, bucking a wave of downgrades from rival banks that rushed to cut their outlooks after the U.S.-Iran memorandum of understanding reached on Sunday.cnbc

The British bank’s contrarian stance rests on a simple argument: reopening the Strait of Hormuz and restoring prewar oil flows will take far longer than markets are pricing in, and the risk of renewed hostilities has not disappeared.cnbc

A Market in Freefall

Oil prices tumbled on Monday and Tuesday after President Donald Trump announced at the G7 summit that a framework peace deal with Iran had been signed and that the Strait of Hormuz would “completely reopen” on Friday without Iranian tolls. Brent crude futures fell 5% on Tuesday to close at $78.96 per barrel, according to CNBC, while U.S. West Texas Intermediate dropped 5.8% to $76.05. It marked the first time Brent had traded below $80 since early March, just days after the war began.xtb

Goldman Sachs slashed its fourth-quarter 2026 Brent forecast to $80 from $90. Morgan Stanley cut its third-quarter outlook to $90 from $100. Citi took the most bearish stance, lowering its third-quarter Brent forecast to $75 and projecting just $65 for 2027.mansfield

Why Barclays Disagrees

Barclays has warned since May that supply normalization would be neither swift nor smooth. When the bank raised its 2026 Brent forecast to $100 from $85 on May 1, it cited months of Strait of Hormuz closure that had drained global inventories to multi-year lows. Three weeks later, it kept the target unchanged, noting that risks remained skewed to the upside.usnews

The bank’s latest assessment cautions that redirecting shipping routes, clearing mines, alleviating logistical bottlenecks, and ramping Iranian production back up will consume weeks or months — not the days the market appears to assume. Barclays has also noted that roughly 60 percent of oil demand is tied to the production and transportation of goods, and while a gradual decline toward $80 per barrel by end-2027 appears feasible, near-term price risks lean higher.oilprice

Risks Ahead

The memorandum of understanding extends the U.S.-Iran ceasefire for 60 days while the two sides negotiate a final accord covering Iran’s nuclear program, sanctions relief, and the release of roughly $25 billion in frozen Iranian assets. A formal signing ceremony is scheduled for June 19 in Geneva. But implementation details remain vague, and a senior U.S. official told CNBC that Iran will only benefit from the deal if it meets its obligations. Barclays has underscored that until a comprehensive agreement is reached, the possibility of renewed tensions — and fresh supply disruptions — cannot be ruled out.reuters