Brent crude oil prices remained elevated on Thursday, with the Brent contract trading at 107.830 US dollars as traders continued balancing Middle East supply risks against expectations that oil markets may gradually loosen into 2027.

While geopolitical disruption linked to the Strait of Hormuz has kept physical markets tight, UBS believes the recent risk premium will fade over the medium term as supply conditions improve and demand growth moderates.

UBS forecasts Brent crude oil prices averaging $100 per barrel in June 2026, easing to $95 by September 2026, $90 by December 2026 and $85 by March 2027.

That suggests the bank expects current tightness to gradually unwind despite continued volatility across energy markets.

Near-term conditions nevertheless remain supportive.

Goldman Sachs noted that “Prompt Brent/WTI crude nearby futures increased by 5/7% week-over-week to $105/101 as flows through the Strait of Hormuz remained very low and on limited signs of progress on a US-Iran deal.”

Physical fuel markets have also tightened considerably in recent weeks.

“The US gasoline market has become very tight, with inventories drawing at a rapid average pace of 0.7mb/d since April 1st to 5% below their historical seasonal median this week,” Goldman Sachs said.

That inventory drawdown has helped offset some concerns surrounding weaker global growth momentum and softer Chinese demand conditions.

Even so, UBS expects oil prices to trend lower through 2026 and into 2027 as supply disruption risks gradually fade and inventories rebuild.

For now, crude markets remain caught between immediate geopolitical tightness and a softer longer-term supply outlook.