Oil prices pulled back on Tuesday as signs of recovering Middle East exports eased some supply concerns, but analysts warn that the global oil market may be entering a period of persistently higher prices. Brent crude for November delivery fell 1.5% to $103.72 per barrel, while West Texas Intermediate (WTI) declined 2.2% to $90.62 per barrel. Despite the drop, regional crude exports rose to 15.5 million barrels per day in September, more than 80% of pre-war levels and the highest since the conflict began seven months ago.
Saudi Arabia has been at the centre of the export recovery, with its crude shipments more than doubling from about 2.45 million barrels per day in August to roughly 5.4 million barrels per day in September. The rebound followed the partial restoration of its damaged East-West pipeline. However, the improved flow has not completely removed concerns about future supply disruptions as uncertainty surrounding the Iran conflict and wider Middle East tensions continues to weigh on the market.
Commodity analysts at Standard Chartered have responded by raising their oil price forecasts for both 2026 and 2027. The bank now expects Brent crude to average $92 per barrel in 2026, up from its previous forecast of $85.50, while its WTI forecast has increased to $86 from $80.25. For 2027, Standard Chartered expects Brent to average $89.50 per barrel, compared with its earlier projection of $77.50. The bank said thin supply buffers mean even another disruption could trigger significant price movements.
Beyond crude oil, rising diesel prices are creating another challenge for policymakers, particularly in the United States. Standard Chartered says diesel has moved from being a market issue to a policy concern, with pressure growing for Washington to intervene as fuel costs remain elevated. While restricting diesel exports could increase domestic supply temporarily, U.S. officials have also warned that such a move could tighten gasoline and jet-fuel supplies and create wider problems for the global fuel market.
Europe is also facing energy risks as winter approaches, with EU officials urging countries to strengthen gas storage and consider measures to reduce electricity and gas demand. European natural gas futures nevertheless fell to €69.30 per megawatt-hour on Tuesday, their lowest level in a month, partly reflecting weaker Chinese LNG demand. Still, Standard Chartered expects the global energy market to take longer to return to its previous balance, as governments and companies increasingly prioritise energy security, larger inventories and diversified supply chains — factors that could keep oil prices elevated into 2027 and beyond.
source: oilprice