Brent at $77/bbl: 3 calls for energy markets (SS edited)
The desk maintains a cautious outlook on Brent prices, predicting an average of $77/bbl for 2027 amid ongoing geopolitical tensions and supply uncertainties. Per the full note , oil flows are returning to near pre-war levels, yet the structural inefficiencies in supply chains indicate a risk premium is likely to persist. The broader market consensus remains varied, with forecasts markedly spread among key firms, indicating potential volatility ahead. Political developments, especially regarding US-Iran relations, will be pivotal in shaping price trajectories.
What the desk is arguing
The desk forecasts Brent crude to average $77 per barrel in 2027, driven by a combination of recovering oil flows and geopolitical tensions. This outlook is supported by the recovery in oil shipments from the Middle East, which, while stabilizing, remain influenced by the volatility of US-Iran relations. As outlined in the ING commentary, we expect continuing sporadic disruptions, keeping a risk premium in the market.
Despite normalization in flows, the recent surge in tanker shipping rates underscores the challenges still affecting the oil market. The desk notes that a full return to efficiency, especially in the Persian Gulf, is lagging. Should any significant dislocation or a deal between the US and Iran materialize, it could further exert pressure on prices, highlighting the cautious optimism in our outlook.
Where it sits in our coverage
Our current coverage points to a consensus average target of $76.50 for Brent Crude by key firms, with variations noted in the forecasts. Key targets include: - Goldman Sachs: $78 - Barclays: $75 - RBC Capital Markets: $76
The desk's projection of $77 sits toward the upper end of this spectrum, suggesting a bullish stance relative to some firms' lower forecasts, especially given underlying uncertainties in OPEC stability and regional geopolitical relations.
How other firms see it
Several firms such as Goldman Sachs and RBC Capital Markets are aligned with the desk's bullish forecast, seeing potential for higher pricing driven by limited new supply, especially if OPEC cohesion deteriorates. Conversely, firms like BofA express caution, advocating for lower targets amid concerns about weakening demand and robust US shale production.
Weekly movements in energy currencies, particularly CAD and NOK, will be instrumental in observing the broader market sentiment towards oil prices as OPEC's dynamics also play into foreign exchange strategies.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Brent expected to average $77/bbl in 2027 with a risk premium intact due to geopolitical uncertainties.
- 02US-Iran relations and OPEC cohesion are critical factors influencing both price stability and market supply scenarios.
- 03Significant divergence in forecasts among firms indicates potential for volatility in the energy markets ahead.
- 04The interplay between oil prices and currencies like CAD and NOK will be important in assessing market dynamics.
Market implications
Watch for potential price fluctuations around Brent targeting $77/bbl, particularly if US-Iran negotiations take a positive turn. Attention should also be paid to OPEC's member stability, as any signs of exits could shift market sentiment significantly.
Risks to this view
A reversal of our bullish Brent forecast could stem from a substantial breakthrough in US-Iran relations leading to increased oil supply or if further OPEC member exits destabilize the group's pricing power, resulting in oversupply in the market.
Articles Brent at $77/bbl: 3 calls for energy markets (SS edited) Published 08:55 Commodities, Food & Agri Energy Translate Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Given the level of uncertainty in energy markets this year and with little sign of a change going into next year, any call on energy markets for 2027 is a low-conviction call. But here are our 3 calls for energy markets for 2027 Warren Patterson Oil flows are recovering, but uncertainty remains How to read our three calls for 2027 Source: ING "> Source: ING ING's base call: Brent to average $77/bbl next year Oil markets have been on a roller coaster this year given events in the Middle East. However, we are going into year-end with oil flows from the region near pre-war levels despite the lack of a deal between the US and Iran.
While oil flows are normalising, the way oil is coming out of the region is anything but normal, which is reflected in the surge in tanker shipping rates, given the very inefficient oil flows. Our base case assumes occasional flare-ups between the US and Iran, meaning a full normalisation of Persian Gulf supplies remains some way off and the oil market is likely to retain a degree of risk premium. However, provided there are no significant or prolonged disruptions, we expect the market surplus to build over the course of 2027, leaving Brent to average around $77/bbl.
A deal between the US and Iran would add further downside risk to this view. Our risky call: OPEC will see more member exits We believe harmony within OPEC could be tested, with the possibility of further members leaving the group. This follows the UAE’s departure earlier this year.
Post-Persian Gulf disruptions, any breakdown or weakening of the group risks adding more supply to the market, which would potentially leave further downside to our base case price forecasts for Brent in 2027. The most likely candidate to leave OPEC is Venezuela, with the US’s growing influence over the Venezuelan oil industry following the capture and arrest of President Maduro at the start of 2026. But we believe that some Persian Gulf producers may also question their membership, particularly if disagreements emerge over the capacity numbers used by the group to set production targets.
Iraq has already made noise around production targets, and following the exit of the UAE, some members may be looking at them enviously, with the UAE pumping record volumes of crude since leaving the bloc. Our bold call: TTF to trade sub-€40/MWh before the end of next year European gas prices have strengthened significantly in 2026. But what goes up must come down, and we believe prices could fall sharply next year.
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