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Sber expects oil demand 'tail' after the Middle East conflict
"Reserves at the Cushing hub (the main oil hub in the U.S.) have fallen to a physical minimum, and it will take years to replenish them. China has reduced imports by 5 million barrels per day, and it too faces a cycle of restoring corporate and sovereign reserves," notes Isakov. This will lead to a supply deficit in the oil market in the second half of 2026 and part of 2027; Brent prices are expected to remain around $75–80 over the next year and a half, according to the expert. The dynamics of oil prices, according to Isakov, are aptly described by the phrase "Rise like a rocket, fall like a feather."
Amid the blockade of the Strait of Hormuz and reciprocal strikes by the U.S. and Iran on energy infrastructure, Brent crude prices reached $126.4 per barrel at the end of April. Prior to the escalation of the conflict, oil was priced at $72.5 per barrel. As of June 26, August futures for Brent were trading between $72.3 and $75.1 per barrel, according to ICE exchange data.
In addition to the factor of replenishing reserves in countries where oil reserves have reached their lowest levels in decades, there is also the issue of extraction infrastructure in the Middle East, points out Dmitry Kasatkin, partner at Kasatkin Consulting. One part of the extraction process has been disrupted, while another has been preserved. This has also contributed to the deficit and rising prices in the oil market. According to Kasatkin, the process of recovery will take between three months to half a year. Main concerns relate to demand in real sectors of the economy, the expert asserts. In Asia, for example, demand has already significantly slowed. Nevertheless, it is expected that by the end of the year, the average price of Brent will settle at around $80 per barrel.
According to the consensus forecast by consulting company Kept, the average price of Brent crude in 2026 will increase by approximately 14% compared to the previous year, reaching $78.6 per barrel (Vedomosti reported on this on May 19). After the opening of the Strait of Hormuz, time will be needed to repair damaged infrastructure and restore tanker routes. As a result, the price premium on oil is expected to remain in the market for at least another quarter following the de-blockade of the strait, Kept points out.
The company forecasts that the consequences of the conflict in the Persian Gulf will continue into 2027. Oil prices are expected to stabilize closer to 2028, analysts note. In 2027, the price is projected to be $69.8 per barrel, and in 2028, it will be $67.7 per barrel.
The market responds less to the balance of supply and demand and more to the resumption of transit through the Strait of Hormuz, observes Sergey Tereshkin, CEO of Open Oil Market. If the situation in the Middle East stabilizes, Brent prices are expected to drop below $75 per barrel in the latter half of the year, he believes.
The market is already discussing the potential exit of Iraq from OPEC+: such a scenario is quite plausible, considering Iraq has long been a chief "violator" of the terms of the agreement, participating in a mostly formal capacity, he recalls. Finally, there will be a significant impact from the potential increase in quotas by the remaining OPEC+ member states, including Saudi Arabia and Kuwait, Tereshkin adds. Increased supply will put downward pressure on prices.
**Other Consequences**
The major losers from the conflict have been states that do not have the ability to soften the impacts of shocks through a temporary expansion of the budget deficit, Isakov noted. Developing countries in Southeast Asia, which are energy importers, have been hit hardest, according to him.
Among corporations, those that did not hedge commodity risks faced the most significant losses, the expert added. Since the shocks of 2025 did not lead to a serious and sustained increase in oil prices, some companies mistakenly bet that 2026 would continue to see a permanent reduction in global volatility. The price of this error has been high – several airlines have gone bankrupt, Isakov revealed.
The situation in the oil market has already led to rising inflation in European countries, Isakov reminds. Annual inflation in the Eurozone rose to 3% in April and 3.2% in May – significantly above the target benchmark of 2%. However, the variation across countries is substantial: in Germany and France, inflation remains below average (2.9% and 2.5%, respectively), while smaller countries on the periphery such as Romania, Bulgaria, and Croatia are pulling the average upward. Energy carriers have played a central role in the inflation rise, notes the expert.
For the U.S., which, unlike Europe, is a net exporter of resources, the conflict has provided an opportunity to avoid raising rates. Nonetheless, for the American economy, the internal investment cycle in AI is more significant, with oil being more of a political issue, Isakov emphasized. The overheating of the U.S. economy is influenced precisely by the enormous internal investment cycle in AI, as it requires vast imports of equipment and materials from around the world. Polarization can be seen in the structure of U.S. imports, the expert explains. Non-AI-related purchases are indeed declining, as would be expected with high rates. However, the total import volume is not falling, as expenditures on capital investments in AI are growing exponentially, according to the Sberbank expert.
For Russia, the conflict in the Middle East has become more of a disinflationary factor, Isakov notes. Its pro-inflationary influence through trade channels is minimal. Russia's main partner, China, has maintained an annual inflation rate of approximately 1.2%. Even the monthly indicators had only recently emerged from deflation into slight growth. Against the backdrop of Russian inflation growth, this effect is virtually unnoticed, assures the director of CEMI at Sberbank.
Source: Vedomosti
