In a significant update to its energy market outlook, Danske Bank has raised its price forecasts for Brent crude, signaling that the global oil market has undergone a structural repricing. Despite the recent U.S.-Iran memorandum of understanding (MOU) and the subsequent de-escalation of regional tensions, the bank argues that the era of $60–$70 oil—the range that characterized the market prior to the conflict—is effectively over.
Danske Bank now forecasts that Brent crude will average $80 per barrel for the remainder of 2026, with prices expected to climb to $85 per barrel in 2027. This forecast reflects a “permanent repricing” of the supply backdrop. Even as the immediate crisis abates, the bank believes a new floor has been established, which will materially alter the calculus for energy equity valuations and producer hedging strategies.
A central pillar of this recovery is the reopening of the Strait of Hormuz. Following the U.S.-Iran deal and the resolution surrounding the postponement of high-level meetings in Switzerland, the Strait—responsible for roughly 20% of the world’s seaborne oil—is expected to return to normal commercial traffic. However, Danske warns that market relief will be gradual. Ramping Iranian production and exports back to pre-war capacity is a process that will take months, not weeks, preventing a sudden supply glut.
While the $80 floor seems firm, the bank notes that a “ceiling effect” may limit short-term price spikes. The primary factor here is the U.S. Strategic Petroleum Reserve (SPR). Despite the easing of supply disruptions, Washington may opt to continue reserve releases through the end of the year to maintain stable fuel prices ahead of the November midterm elections. This continued release, combined with the slow recovery of Iranian supply, is expected to compress the trading range in the near term.
For investors and traders, the timeline of Iranian production normalization remains the critical variable. Options markets and calendar spreads are expected to remain sensitive to any delays in the production ramp-up. Any friction in the implementation of the MOU could provide immediate upside pressure on front-month contracts, even as the broader market adjusts to a structurally tighter supply baseline.
