Oil prices could move toward $70 per barrel this year as strong inventories ease concerns about supply disruptions. Julius Baer expects crude prices to remain under pressure despite continuing geopolitical tensions across the Middle East. The bank also sees prices potentially falling into the $60s during 2027 if supply conditions improve further.
Norbert Rücker, head of economics and next generation research at Julius Baer, highlighted stronger market fundamentals. He pointed to recent data from the International Energy Agency and US Energy Information Administration. That data indicates that global and American inventories have remained stronger than earlier forecasts suggested.
Meanwhile, rising Gulf production could add further pressure to the market during the coming months. However, geopolitical risks continue creating uncertainty because tensions between Washington and Tehran remain unresolved. Recent attacks involving oil vessels near the Strait of Hormuz have also increased concerns about regional supply.
Brent crude recently closed at $88.52 per barrel, while West Texas Intermediate reached $82.40. Both benchmarks gained after attacks on oil ships increased concerns surrounding maritime security. ADNOC also confirmed an attack against one of its vessels while traveling through the Strait of Hormuz.
The incident caused no injuries, while authorities said they brought the situation under control. Nevertheless, crude shipments through the strategic waterway have continued despite recent military tensions. Asian buyers, including China and India, have continued purchasing Gulf crude despite elevated regional risks.
Iran also appears to remain an important supplier for some buyers across Asian markets. Furthermore, estimates suggest that around nine million barrels per day continue moving through the Strait. Some shipments may remain difficult to track because smaller vessels sometimes operate without active transponders.
Consequently, conventional shipping and satellite data may not capture every crude movement accurately. Strategic petroleum reserve releases have also added supplies, reaching around half of previously announced volumes. These developments have strengthened expectations that the global market can absorb additional production.
At the same time, demand remains relatively resilient across several Western economies. However, weaker consumption across parts of Southeast Asia could create additional pressure on crude demand. Limited data makes it difficult to determine whether that weakness represents a temporary slowdown or longer trend.
China’s subdued demand also continues limiting the potential for a stronger global consumption rebound. As a result, oil prices face pressure from both improving supply and uneven demand growth. Julius Baer therefore maintains a cautious outlook while expecting additional downside for crude benchmarks.
The bank also expects Gulf producers to gradually restore exports despite continuing uncertainty around regional shipping. Meanwhile, alternative routes could help exporters reduce their dependence on the Strait of Hormuz. The UAE has increased crude exports while developing alternative routes during the ongoing shipping disruptions.
The country aims to reach five million barrels of daily oil exports as infrastructure expands. Saudi Arabia has also redirected some shipments toward the Suez Canal to reach important customers. That strategy could reduce some supply losses caused by attacks affecting Red Sea shipping routes.
Moreover, producers have strong financial incentives to restore exports and recover lost revenues. A lasting Middle East peace agreement could therefore accelerate shipping recovery and pressure crude prices sharply lower. However, renewed escalation could quickly reverse that trend by damaging energy infrastructure and threatening shipping.
Such developments could remove supplies from the market and create another significant risk premium. For now, stronger inventories provide an important buffer against sudden disruptions across global energy markets. Therefore, oil prices could gradually move toward the $70 range if supply recovery continues.
Yet the outlook remains highly dependent on regional security, global demand, and the pace of Gulf production. Investors will continue watching inventory data, shipping activity, and production levels for clearer signals. Meanwhile, any major disruption around key waterways could quickly change the market’s current direction.
