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"Sber" Expects Oil Demand "Tail" After the Middle East Conflict
"Stocks at the Cushing hub (the main oil hub in the U.S.) have fallen to a physical minimum, and it will take years to replenish them. China has reduced imports by 5 million barrels a day, and it will also need a cycle to restore corporate and sovereign reserves," notes Isakov. This will create a shortfall in the oil market in the second half of 2026 and part of 2027, while Brent prices are expected to hover around $75–80 in the next year and a half, the expert predicts. According to Isakov, the dynamics of oil prices are aptly described by the phrase "Rise like a rocket, fall like a feather."
Against the backdrop of the blockade of the Strait of Hormuz and mutual strikes by the U.S. and Iran on energy infrastructure, Brent oil prices reached $126.4 per barrel at the end of April. Before the conflict escalated, oil was priced at $72.5 per barrel. As of June 26, August futures for Brent oil were trading between $72.3 and $75.1 per barrel, according to data from the ICE exchange.
In addition to the factor of replenishing reserves in nations where oil reserves have reached their lowest levels in decades, there is also the issue of oil extraction infrastructure in the Middle East, notes Dmitry Kasatkin, partner at Kasatkin Consulting. One part of the extraction process has been disrupted, while another has been conserved. This has additionally contributed to the shortfall and rising prices in the oil market. Kasatkin estimates that the recovery process will take anywhere from three months to six months. Major concerns remain surrounding demand in real economic sectors, he asserts. In Asia, for example, demand has already significantly slowed. However, forecasts for the year suggest that the average Brent price will be around $80 per barrel.
According to the consensus forecast from the consulting company Kept, the average price of Brent oil is expected to rise by approximately 14% in 2026 compared to the previous year, reaching $78.6 per barrel. (Vedomosti reported on this on May 19.) After the Strait of Hormuz is reopened, time will be required to repair the damaged infrastructure and restore tanker routes. Consequently, a price premium in oil will remain in the market for at least one more quarter following the obstruction's resolution, Kept analysts indicate.
The company predicts that the ramifications of the conflict in the Persian Gulf will linger into 2027. Oil prices are expected to stabilize closer to 2028, according to analysts. In 2027, the price is projected to be $69.8 per barrel, and in 2028, $67.7 per barrel.
The market reacts not only to the balance of supply and demand but also to the resumption of transit through the Strait of Hormuz, notes Sergey Tereshkin, General Director of Open Oil Market. Should the situation in the Middle East stabilize, Brent prices will be below $75 per barrel in the latter half of the year, he believes.
The market is already discussing the potential exit of Iraq from OPEC+: this scenario is quite likely, considering that Iraq has long been a primary "violator" of the deal's conditions, participating in it more nominally, he reminds. Furthermore, the anticipated increase in quotas among the remaining OPEC+ member countries, including Saudi Arabia and Kuwait, will also influence the market, Tereshkin adds. An increase in supply will exert downward pressure on prices.
Additional Consequences
The primary losers from the conflict have been states unable to cushion the effects of shocks through temporary budget deficit expansions, Isakov reported. Particularly hard hit have been developing Southeast Asian countries that are energy importers.
Among corporations, those that did not hedge commodity risks suffered the most, the expert added. Because the disruptions of 2025 did not lead to serious and sustained price increases for oil, some companies mistakenly bet that there would be a continuous decline in global volatility in 2026. The cost of this error has been high — several airlines have gone bankrupt, Isakov reported.
The current situation in the oil market has led to rising inflation in European countries, Isakov points out. Annual inflation in the Eurozone rose to 3% in April and 3.2% in May — significantly above the 2% target. The variation across countries is substantial: inflation in Germany and France remains below average (2.9% and 2.5%, respectively), while smaller peripheral countries, such as Romania, Bulgaria, and Croatia, mainly drive the figure upward. Energy sources have played a crucial role in inflation growth, the expert emphasizes.
For the United States, which, unlike Europe, is a net exporter of resources, the conflict provided an opportunity not to raise rates. However, for the U.S. economy, a more significant factor is the internal investment cycle in AI, with oil being more of a political issue, Isakov stressed. The overheating of the U.S. economy is primarily influenced by the colossal internal investment cycle in AI, which requires significant imports of equipment and materials from around the globe. Import trends in the U.S. exhibit polarization, the expert explains. Non-AI-related purchases are indeed decreasing, as would be expected with high interest rates. However, the overall level of imports is not declining as capital expenditures in AI are growing exponentially, asserts Sber’s expert.
For Russia, the Middle Eastern conflict has acted more as a disinflationary factor, Isakov notes. Its inflationary impact through trade channels is minimal. In Russia's primary partner, China, annual inflation has remained low at about 1.2%. Even monthly figures have only recently emerged from deflation into slight positive growth. Against the backdrop of current Russian inflation rates, this effect is virtually unnoticed, assures the director of CMI at Sberbank.
Source: Vedomosti
