Brent Oil: Higher prices to extend into 2027 – Deutsche Bank

Deutsche Bank’s Henry Allen and Jim Reid highlight that Brent Oil has surged again, with spot prices above $107 per barrel and December 2027 futures at new highs. They link the move to stalled US–Iran diplomacy, scepticism over a Strait of Hormuz reopening, and markets increasingly pricing a prolonged period of elevated Oil prices well into 2027.

US Iran tensions sustain elevated prices

"The relentless bond selloff has shown no sign of easing, with a fresh rise in yields overnight as oil prices keep moving higher. The immediate driver was the weekend news that President Trump had rejected Iran’s proposal. So Brent crude was up +0.92% yesterday to $105.28/bbl, and this morning it’s up another +1.92% to $107.30/bbl."

"In general, there’s been a growing awareness that hopes for a US-Iran deal have been repeatedly dashed in recent months, and that scepticism about the Strait of Hormuz reopening any time soon has led investors to price a longer period of high prices into next year."

"For instance, the December 2027 Brent future (+0.22%) closed at a new high of $80.29/bbl yesterday, and this morning it’s up again to $80.67/bbl. So for markets it wasn’t just a story about front-end prices yesterday, but a more protracted period of high oil prices stretching well into 2027."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)