Rabobank strategists Michael Every, Florence Schmit and Joe DeLaura note that Brent crude has surged as Middle East conflict intensifies and the Strait of Hormuz remains effectively closed. They now expect flows only gradually recovering to about 80% of pre-war levels by August, with Brent to average $107/bbl in Q2 2026, $96/bbl in Q3 and $90/bbl in Q4 and WTI to average $98/bbl, $88/bbl, and $83/bbl for Q2-Q3-Q4 of 2026.

Benchmarks reprice extended supply shock

"Brent and WTI crude oil benchmarks surged to nearly $120 a barrel on 19 March as the war in the Middle East deepened and attacks on energy assets intensified. While paper prices stayed below the $120/bbl mark, physical prices have already surpassed these levels, with Dubai crude exceeding $150–166/bbl. Markets are slowly repricing the risk of a prolonged disruption to global energy flows."

"We have earlier noted that it would take months for energy flows to resume to pre-war levels once the Strait of Hormuz would be reopened. As it stands now that timeline has just shifted further back and we expect a full closure of the Strait to last until the end of April. Shipping will only slowly return after that and we expect crude oil and refined product flows to resume to around 80% of pre-war levels by August."

"We are raising our Brent and WTI crude oil targets again after a material deterioration to the prospect of any swift resumption of energy flows. We estimate that Brent will average $107/bbl in Q2, $96/bbl in Q3, and $90/bbl in Q4. We have raised our 2027 estimates up to $83/bbl on average for the year before moderating to $71.50/bbl in 2028. Our WTI quarterly average estimates are $98/bbl, $88/bbl, and $83/bbl for Q2-Q3-Q4 of 2026 and $77/bbl for 2027."

"We also see risk of further attacks on energy infrastructure in the Gulf inflicting lasting supply curtailments, posing significant upside price risk to our natural gas and crude oil views."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)