SEATTLE (Oil Monster): Wood Mackenzie expects crude oil prices to recover to reach $85 per barrel in July as global inventories continue to tighten despite easing geopolitical tensions following the recent agreement between the U.S. and Iran.
According to Sushant Gupta, Director at Wood Mackenzie, much of the market optimism surrounding the agreement has already been factored into current prices. He noted that the disruption of oil supplies will persist, especially due to congestion in the Strait of Hormuz. As per reports, hundreds of vessels are waiting to transit.
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Gupta noted that the normalization of oil flows will take time. As a result, inventories are expected to continue declining and could reach their lowest levels by mid-to-late July. Such a situation is likely to provide support for a modest rebound in crude prices, he added.
Wood Mackenzie forecasts global oil demand to decline by between 1 million and 1.5 million barrels per day in 2026. The overall consumption for the current year is projected to remain at lower levels, despite lower oil prices and improving market sentiment likely to lead to some demand recovery during the second half of the year.
Looking ahead, the consultancy expects crude prices to trade in the $85-$90 per barrel range during August and September before easing later in the year. It forecasts average crude prices of approximately $104 per barrel in 2026 and around $80 per barrel in 2027.
