Macquarie Cuts 2026-27 Brent Forecasts as Gulf Oil Supply Recovers Faster

A sudden lull in Gulf tensions has sent a ripple through global oil markets, prompting Macquarie Group Limited to slash its Brent price outlook for the next two years.

The Australian investment bank now projects an average Brent price of US$77 per barrel in 2026—down from its earlier estimate of US$89—and US$64 per barrel in 2027, a cut from US$74. The revision follows a June 23 report that highlighted the possibility of Gulf producers restoring output and exports more quickly than market participants had anticipated.

Macquarie’s strategists, Peter Taylor and Vikas Dwivedi, explained that the region’s deep production expertise, ample storage capacity and operational flexibility could accelerate the return of supply. "Market participants are substantially underestimating the pace of recovery and the oil market’s ability to heal itself," the strategists wrote.

The change comes after a brief period of reduced shipping activity through the Gulf, triggered by heightened tensions between the United States and Iran. The temporary ceasefire, which halted hostilities for a few weeks, allowed shipping lanes to reopen and enabled Gulf producers to resume output without the logistical constraints that had previously limited flow.

Macquarie noted that the oil market was already grappling with an oversupply before the conflict. Softer demand, coupled with inventory drawdowns, had helped absorb earlier supply shocks. The bank argued that a faster return of Gulf flows would further ease the oversupply, exerting downward pressure on prices.

In the short term, market volatility is expected to persist as shipping activity gradually normalises. Over the longer term, the rebuilding of commercial and strategic inventories could provide some support to prices, the bank added.

The revised forecast carries practical implications for a range of stakeholders. Traders will need to recalibrate pricing models to reflect lower expected price levels. Gulf‑producing countries, many of which are members of OPEC+, may find a reduced need for production cuts, while buyers in Europe and Asia could benefit from lower input costs.

The update also underscores the enduring influence of geopolitical developments in the Middle East on global energy markets. Although the ceasefire has eased immediate tensions, underlying volatility remains a risk factor for future supply disruptions.

Macquarie’s outlook joins a broader debate among analysts. Firms such as Goldman Sachs and Citi have also signalled expectations of increased Middle East oil supply, though their price projections differ.

The bank’s forecast is based on a blend of market data and its assessment of the Gulf’s production capacity. It does not account for potential new geopolitical shocks or changes in OPEC+ policy, which could alter the supply trajectory.

As of the latest data, Brent crude has traded in a range that reflects market uncertainty about the pace of Gulf supply recovery. The revised forecast suggests that, if the Gulf’s production rebound continues as expected, Brent prices could remain below the levels seen in 2025.

In summary, Macquarie’s decision to cut its 2026–27 Brent price forecasts reflects a belief that Gulf oil flows will recover faster than previously thought, driven by the temporary ceasefire and the region’s production capabilities. The market will likely experience short‑term volatility as shipping normalises, but the longer‑term effect could be a sustained downward pressure on Brent prices.

The next steps for market participants will involve monitoring shipping activity, inventory levels, and any new geopolitical developments that could influence the pace of supply recovery.