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Informist, Friday, Feb. 27, 2026

 

MUMBAI – ING Economics has raised its average price forecast for Brent crude oil to $62 per barrel in 2026 from $57 per barrel earlier, mainly because of rising uncertainty around a nuclear deal between the US and Iran. While it still expects crude oil prices to weaken this year due to a surplus, ING now believes the oil market is tighter than expected and the surplus could be lower.

 

"The oil market continues to deal with lingering uncertainty over how the situation between the US and Iran evolves in the coming weeks and months," Warren Patterson, head of commodities strategy at ING Economics, said in a report Friday. "While there are efforts to find a diplomatic solution, the buildup of US military assets means there is the very real risk of significant escalation in the event a deal cannot be reached. The latest round of talks failed to lead to a deal; instead, further talks are scheduled, but we are moving dangerously close towards President Trump's deadline for a deal," Patterson said.

 

The market is pricing in a large risk premium due to this uncertainty, which he believes to be as much as $10 per barrel. However, the strength in the oil market is not entirely due to uncertainty over Iran. "The market is not as well supplied as we initially expected. This is very evident when looking at the forward curve, with the backwardation suggesting the large surplus many were forecasting has not hit the market," he said.

 

Supply disruptions in Kazakhstan at the start of the year have tightened the market, while reluctance by some buyers, such as India, to continue purchasing Russian oil has left the unsanctioned market tighter than the overall oil balance suggests. "Indian imports of Russian oil in January were in the region of 1m b/d (million barrels per day), down from an average of 1.5m b/d in 2025. As a result, there has been a buildup of Russian oil at sea," Patterson said.

 

However, discounts on Russian Urals have been widening to entice buyers, and it seems to be working, with Chinese buyers taking advantage of widening discounts. If China can absorb Russian barrels, which would have gone to India in the past, the impact on the market should be more limited, he said. If not, there could eventually be more meaningful declines in Russian oil output. 

 

At 1535 IST, the most-avtive May contract of Brent crude on the Intercontinental Exchange was up 1.5% at $71.91 per barrel. The April contract of West Texas Intermediate Crude on NYMEX were 1.5% higher at $66.20 per barrel.   End

 

US$1 = INR 90.97

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Saji George Titus

 

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