Yesterday the price of crude oil (WTI) fell to just below US$91 per barrel. This is two days after the United States Navy imposed a naval blockade of the entire Iranian coastline.
This indicates two things -
1. the world can do without 3.0 million barrels of Iranian oil (their daily production).
2. The world markets prefer peace more than anything else. The naval blockade is on but the shooting from Iran has stopped.
Here is ChatGpt with a list of forecasts of world oil prices at end 2026 by the World Bank, Goldman Sachs, Reuters and other banks:
- Baseline forecasts (most institutions): around US$55–60/bbl average for 2026 (e.g. EIA ~US$55, JPM ~US$60).
- World Bank view: ~US$60/bbl in 2026 (downward trend).
- Goldman Sachs / banks: even lower, around mid-$50s (≈US$56).
- Reuters poll: ~US$61 average (slightly above $60).
- End-2026 (not average):
- Some projections: ~US$70/bbl by end-2026 after earlier spikes.
- But bearish scenarios: could stay in $50s–$60 range if oversupply persists.
- Key drivers:
- Oversupply vs modest demand → downward pressure
- Geopolitical risks (e.g. Middle East) → upside spikes (even >$100 short term)
- Bottom line
- Average 2026: mostly below or around $60
- End-2026: uncertain — base case often near/above $60 (≈$60–70)
- Yes/No: Not clearly below $60 by end-2026 — depends heavily on geopolitics.
The baseline forecasts (average??) indicate an oil price of between US$55 to US$60 per barrel by end 2026.
There is strong demand for oil at any day of the week but the supply of oil is going to be more than what the markets can absorb. There is an oil glut developing. Once this Iran thingy is settled there will be even more oil flowing into the world markets.
The oil rig count in the US is almost constant (550 rigs in March). The oil rigs are not exactly in a hurry to increase production.
If oil drops to US$60 per barrel or lower, many, meeny, miny oil exporting countries are going to be in serious financial trouble. Benua Asia Tenggalam will be among them. (And the dodo is going into a General Election).
