OCBC Cuts 2027 Brent Forecast To US$75 On Easing Supply Risks

KUALA LUMPUR, Nov 11 (Bernama) -- OCBC Bank has lowered its end-2027 Brent crude oil forecast to US$75 per barrel from US$85, citing improved prospects for de-escalation of the West Asia conflict and additional Gulf export capacity. 

It maintained its end-2026 forecast at US$100 per barrel.

The bank’s commodities strategist, Sim Moh Siong, said the oil market had little inventory cushion, tanker capacity remained constrained and shipping through West Asia was still vulnerable to disruption.

He noted that greater Democratic control of the US Congress could increase the political and fiscal costs of further US military action, putting pressure on Washington to seek a diplomatic settlement, although Congress cannot dictate US policy towards Iran.

“Over time, rebuilding inventories and additional Gulf export infrastructure should also improve the market’s ability to absorb supply disruptions,” Sim said in a note on Wednesday.

He said the earlier disconnect between recovering Gulf exports and elevated oil prices largely reflected transportation bottlenecks.

Tanker attacks, longer shipping routes and tight vessel availability had driven freight costs sharply higher, keeping delivered crude prices elevated even as regional exports recovered, he said.

Falling global inventories compounded the squeeze, with front-month Brent futures averaging around US$108 per barrel in October despite improving Gulf supplies.

Sim said alternative export routes could further strengthen supply security in 2027. Saudi Arabia could temporarily repurpose a domestic gas pipeline, potentially providing up to 1.2 million barrels per day of additional crude transport capacity.

“The United Arab Emirates is also accelerating a second pipeline to Fujairah that could eventually add around 1.8 million barrels per day of bypass capacity. Together, the projects could provide close to three million barrels per day of additional capacity outside the Strait of Hormuz, although completion dates and effective throughput remain uncertain,” he said.

Sim said refined products remained tighter than crude oil, as Ukrainian attacks continued to disrupt Russian refining capacity. Diesel supplies also remained vulnerable despite improving exports and some easing in margins.

While immediate pressures had moderated, the underlying refined-products market remained fragile, he added.

-- BERNAMA