Brent Crude To Remain Elevated In Fourth Quarter 2026 - HLIB
KUALA LUMPUR, Sept 14 (Bernama) -- Brent crude will remain elevated in the fourth quarter of 2026, trading between US$95 and US$100 per barrel toward the year-end, supported by persistent Strait of Hormuz disruptions, rising risks in the Bab el-Mandeb Strait and constrained West Asia exports, said Hong Leong Investment Bank (HLIB) today.
HLIB has maintained US$75 per barrel for 2027 and noted that alternative routes were also tightening, with Saudi’s East-West Pipeline disruption and subdued Red Sea traffic limiting crude rerouting.
“The upcoming US midterm elections could add volatility to Brent prices. Hence, we raise our 2026 Brent assumption to US$90 per barrel from US$80, while maintaining US$75 per barrel for 2027,” it said in a research note today.
At the time of writing, Brent crude jumped 2.93 per cent to US$107.70 per barrel, after Saudi Arabia shut the East-West pipeline after drone attacks on the facility.
Brent surged past US$100 per barrel on Sept 10, after escalating tensions in West Asia raised concerns over simultaneous disruptions at the straits of Hormuz and Bab-el-Mandeb.
Over the weekend, Saudi Arabia reported that its 1,200km East-West pipeline, a crucial alternative route to bypass the Strait of Hormuz, was temporarily shut after drone attacks, reportedly launched from Iraq.
The pipeline has a total capacity of seven million barrels per day, of which five million barrels per day is available for exports and two million barrels per day supplies domestic refineries.
“This has raised fresh concerns over the Strait of Hormuz’s alternative route at the Red Sea and Bab el-Mandeb. Yanbu’s exports fell to a six-month low of 1.43 million barrels per day versus 3.9 million in the prior three months,” said HLIB.
Global oil deficit widened sharply to 4.1 million barrels per day in August 2026 from just 0.1 million barrels per day in July 2026. It is expected to widen to 4.8 million barrels per day in September 2026, driven by West Asia supply disruptions, with regional production down 7.8 per cent month-on-month (m-o-m).
HLIB said Kazakhstan’s higher output (+10 per cent m-o-m) and the US’s (+0.4 per cent m-o-m) have partly offset this.
“Another alarming data is that West Asia crude production shut-ins rose to 6.7 million barrels per day in August 2026 from 5 million in July 2026, reflecting persistent constraints on regional exports and damaged energy infrastructure,” it added.
HLIB also believed China has adapted to Strait of Hormuz disruptions by diversifying sourcing, including raising its crude oil purchases from Russia. Its seaborne supply rose to 1.68 million barrels per day in August 2026 from 1.40 million in July 2026.
-- BERNAMA