Danske Bank sees Brent at $80 this year, rules out return to pre-war lows
Danske's floor call is the most market-relevant element here: by explicitly ruling out a return to the $60-$70 pre-war range, the bank is signalling that the structural supply backdrop has been permanently repriced even as the immediate crisis abates. That has implications for energy equity valuations and producer hedging strategies, where a sustained $80 floor changes the calculus materially. The strategic reserve question adds a near-term wrinkle; continued SPR releases could cap any rally in the months ahead even as Iranian supply recovers slowly, creating a ceiling effect that compresses the trading range. Options markets and calendar spreads will be sensitive to the timeline uncertainty around Iranian production normalisation, with any delay in the ramp-up likely to provide short-term upside pressure on front-month contracts.
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Danske Bank forecasts Brent will average $80/bbl for the rest of 2026, rising to $85 next year, and says prices will not return to pre-war levels of $60-$70 following the US-Iran deal.
Summary:
- Danske Bank forecasts Brent crude will average $80 a barrel for the remainder of 2026, rising to $85 a barrel in 2027, according to the bank's research note
- The Danish lender says the US-Iran deal will reopen the Strait of Hormuz to oil shipments but warns that returning Iranian production and exports to normal capacity will take months, per the note
- Danske explicitly rules out a return to the $60-$70 per barrel range that prevailed before the war began in March, according to the research note
- The bank flags that continued US strategic petroleum reserve releases could shape the near-term supply picture, noting Washington may opt to maintain the policy for political reasons ahead of November mid-term elections, per the note
Danske Bank has substantially upgraded its oil price outlook in the wake of the US-Iran agreement, forecasting that Brent crude will average $80 a barrel for the rest of 2026 before rising to $85 a barrel next year, and making a pointed call that prices will not revisit the $60-$70 range that characterised the market before the war began in March.
The Danish lender frames the deal as a significant turning point for supply, reopening the Strait of Hormuz to oil shipments after months of disruption that has kept a persistent floor under prices since hostilities broke out. The Strait, through which roughly a fifth of the world's seaborne oil passes, had been effectively closed to normal commercial traffic since the start of the conflict, representing one of the most acute supply shocks the oil market has absorbed in decades.
Danske is careful, however, not to overstate the speed of the recovery. The bank notes that ramping Iranian production and export capacity back toward pre-war levels is a process measured in months, not weeks, meaning the supply relief will arrive gradually rather than in a single step. That phased normalisation is part of the reasoning behind the bank's relatively firm price forecast even as the geopolitical premium begins to unwind.
A secondary factor complicating the outlook is the future of strategic petroleum reserve policy. The US and other countries have been releasing emergency stocks to cushion the market through the supply shock, and while Danske acknowledges that the rationale for those releases has now weakened considerably, it suggests Washington may choose to continue the drawdowns regardless. With mid-term elections scheduled for November, keeping fuel prices from rising sharply in the final months of the campaign carries obvious political appeal, and the bank appears to factor that possibility into its supply calculus.
The net result of Danske's analysis is a market that is meaningfully better supplied than it was at the height of the conflict, but one whose price floor has been structurally reset. The combination of a slow Iranian ramp-up, uncertain reserve policy, and a fundamentally tighter supply baseline leads the bank to conclude that the pre-war price regime is unlikely to return, regardless of how smoothly the post-deal normalisation unfolds.
Thanks for the inflation Mr T.
This article was written by Eamonn Sheridan at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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