UBS Revises Brent Forecast Upward Amid Middle East Supply Fragility

The bank also lifted its 2027 price outlook, hiking projections for March, June, and September by $5 per barrel. While Gulf crude loadings have improved from earlier this year, volumes remain stubbornly below prewar levels. October saw a record frequency of vessel attacks near the Strait of Hormuz, driving insurance premiums and freight costs to historic highs. Transport rates for very large crude carriers heading to China have surged to $40 a barrel, a stark contrast to the $1-$3 range typical of the last decade.

Market tension intensified Wednesday as Brent rose 1.25% to $115.30 following reports of a potential Houthi missile strike on the Ras Tanura refinery. Although Saudi authorities have not confirmed a direct hit, the incident highlights the vulnerability of critical infrastructure. With global inventories thinning and major strategic reserve releases largely exhausted, analysts warn that the current undersupply creates a floor for prices. Complicating the outlook, Washington has reportedly signaled to Gulf states that a new U.S. military campaign against Iran may follow the November 3 midterm elections, leaving traders to brace for further instability.