As the supply of the Hormuz Strait increases, UBS has revised down its oil price expectations.

The amount of energy transportation passing through the Hormuz Strait is constantly increasing, prompting UBS to lower its oil price forecast for 2026-2027. UBS currently expects the average price of Brent crude oil this year to be $84 per barrel, down $9 from earlier forecasts. The bank has also lowered its 2027 oil price forecast from $85 per barrel to $75 per barrel. UBS stated: "Geopolitical risks have decreased and the rapid rebound in supply have led to price declines beyond our expectations." The bank expects oil prices to rebound slightly to $80 per barrel in the second half of this year as floating reserves in the Gulf region return to normal and demand increases. UBS also believes that risk premiums will be higher because the road to recovery may still be bumpy. UBS stated: "The demand for replenishing inventories should continue to support prices until the end of 2027, but the scale of required inventory rebuilding is smaller than our previous expectation of 1 billion barrels."