The 2026 oil price outlook from major energy analysts has fluctuated more sharply than at any point since 2020. Coming into the year, the consensus view was markedly bearish. The International Energy Agency had projected global supply to outpace demand by roughly 3.7 million barrels per day, a surplus not seen since the 2015-2016 price collapse, and most analysts had formulated cases with oil remaining in the $60s, with the possibility of downside into the $50s.

That picture changed dramatically when U.S. and Israeli airstrikes on Iran triggered an effective closure of the Strait of Hormuz. West Texas Intermediate (WTI) crude spiked to more than $110 per barrel in early April and has averaged around $100 per barrel since. In its May Short-Term Energy Outlook, the U.S. Energy Information Administration forecast that oil prices would ease by roughly 15% by the fourth quarter if Middle Eastern producers can route cargoes around the Hormuz chokepoint and inventories begin to refill.

Even with continuing reports of a possible U.S.-Iran peace deal emerging in recent weeks, the fragile ceasefire has prompted some major analysts to recently raise their 2026 average WTI forecasts, citing tighter physical balances than expected at the start of the year. The common theme across these revisions is that even as the supply shock recedes, the demand-side concerns that defined the prewar outlook have not gone away. In fact, there is growing concern that a protracted war resulting in sustained oil prices above $100 per barrel could lead to demand destruction.

Recent conversations with our clients in the Gulf of America indicate there has been no change in planned capital expenditures or expected activity levels due to uncertainty in the long-term oil price as a result of the ongoing war, while a peace deal is awaited.