Brent Crude Oil Prices Projected to Stabilize at $70 per Barrel Amid Israel-Iran Tensions

Brent Crude Oil Price Forecast

According to a recent analysis by Emkay Research, Brent Crude Oil prices are anticipated to average approximately $70 per barrel in FY26, despite the ongoing tensions and conflicts between Israel and Iran. The report emphasizes that the oil market remains fundamentally well-supplied, with increasing production from both OPEC+ and non-OPEC+ nations.

It stated, “We maintain our forecast of Brent at $70/bbl for FY26. The oil markets are fundamentally well-supplied with rising production levels.” This consistent supply is expected to contribute to price stabilization in the upcoming weeks, although geopolitical uncertainties may lead to short-term fluctuations.

The report highlighted that Israel's military actions against Iranian nuclear facilities initially caused a significant spike in oil prices, with Brent nearing $80/bbl. However, prices have since stabilized around $75/bbl, despite continued hostilities from both parties. Iran has retaliated by targeting Israeli cities with missiles, while Israel has intensified its military operations against Iran. The US administration's stance on a potential ceasefire remains ambiguous.

Market Dynamics and Future Outlook

As per the report, unless there is substantial damage to oil and gas infrastructure akin to the disruptions seen during the Russia-Ukraine conflict, oil prices are likely to stabilize. A ceasefire could potentially lower Brent prices to below $70/bbl.

Additionally, the report noted that Iran has partially closed its South Pars gas field following Israeli strikes. Although a significant fuel depot and gas refinery were affected, the repercussions appear limited to domestic markets. Israel has also halted operations in two gas fields that supply Egypt and Jordan.

Consequently, spot LNG prices have risen to around $13.5/mmbtu, up from $12/mmbtu prior to the conflict. The report further indicated that oil markets in 2025 remain well-supplied, with increasing inventories. While short-term volatility may persist, the average Brent Crude price for the year is still projected to hover around $70/bbl.

At this price point, both upstream oil producers and oil marketing companies (OMCs) are positioned in a secure zone. However, the report suggests that OMCs present a more appealing valuation and a favorable risk-reward scenario.

Concerns regarding the gas market were also raised, as the early arrival of monsoons has affected demand, leading to an uncertain outlook for gas.