UBS lowers Brent price forecasts amid rising Middle East oil supply

Oil had a rough few months. Prices surged, analysts panicked, and UBS briefly thought Brent crude was heading toward $100 a barrel. Now, with ceasefire negotiations progressing and Middle Eastern supply creeping back online, UBS has reversed course and cut its Brent forecasts.

WTI crude fell 4.4% on June 24 to just below $70 per barrel, erasing the gains that accumulated since the US-Iran conflict began earlier in 2026. Brent crude, which had surged to projections between $80 and $120 per barrel during the height of the conflict, has moderated significantly as supply conditions shifted.

How we got here

The conflict disrupted the Strait of Hormuz, a narrow waterway that handles roughly 20% of global seaborne oil trade. That near-closure sent energy markets into a predictable spiral. UBS raised its Brent projection to approximately $100 per barrel in May 2026, citing conflict-driven supply risk.

A framework for a US-Iran deal was announced around June 15, and Brent fell more than 5% in a single session, settling near $82.84. Tanker traffic through the Strait began recovering as ceasefire negotiations progressed, and UBS revised its forecasts back down. The bank now expects Brent to average lower in coming periods as regional flows resume and global inventories adjust to reflect the returning supply.

What lower oil prices mean for markets

Lower energy costs have a straightforward relationship with inflation. When oil prices fall, transportation costs drop, manufacturing inputs get cheaper, and consumer energy bills shrink. If inflation cools further, the argument for keeping rates elevated weakens, and that tends to be good news for risk assets broadly.

For crypto markets, the connection is less direct but still worth tracking. When energy prices were surging earlier in 2026, the inflationary read-through kept risk appetite suppressed. A sustained oil price decline that feeds through into softer inflation data could loosen those constraints.

There is also a more mechanical link between energy costs and crypto mining economics. Lower electricity prices, driven partly by cheaper natural gas and fuel oil, reduce the operational cost base for Bitcoin miners. Reduced sell pressure from miners is generally a constructive signal for the asset.

The more immediate market risk is volatility in the other direction. The US-Iran deal framework announced in mid-June is exactly that, a framework. If negotiations collapse or the Strait of Hormuz faces renewed disruption, oil prices could reverse quickly.

UBS cutting its Brent forecast is a meaningful signal. When a major institution that was projecting $100 crude in May walks that back in June, it signals that the supply recovery is happening faster and more durably than the initial conflict narrative suggested.

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