(Investing) – prices are anticipated to hover in the $60 per barrel to $70 per barrel range in the near term, as traders weigh the trajectory for Russian oil exports over the coming months, according to analysts at UBS.
In a note, the analysts including Giovanni Staunovo predicted that Brent crude would end the year at $62/bbl and retained “a more constructive price outlook for next year.”
“By mid-2026, the market focus will likely shift to 2027, during which we anticipate stalling non-OPEC+ supply growth, and specifically a market focus on limited spare capacity amid still rising oil demand,” they wrote. Brent is tipped to trade at $67/bbl at the end of 2027.
Oil prices have recently been influenced by the outlook for crude being sent out of Russia — particularly U.S. sanctions on the country’s two largest oil producers, as well as Ukrainian attacks on Russian energy infrastructure, such as export terminals and refineries.
Despite bets from some market participants that the disruptions will be short-term, “[w]e are concerned that oil investors are still complacent and are underestimating the risks to supply,” the analysts said.
“The attacks are increasing and, together with the sanctions, will eventually hurt Russia’s exports and production.”
Some refiners in Asia, meanwhile, have indicated that they may reduce their purchases of Russian oil, choosing instead to buy barrels from the Americas or Middle East.
However, the UBS analysts noted, Ukrainian attacks on Russian refineries have helped temporarily boost Russian crude exports, with the momentary shutdown of these sites hitting domestic demand and making more barrels available for export.
Meanwhile, higher oil-on-water levels have so far not translated into an increase in oil on land, the analysts said, adding that, for this reason, they “expect prices to stay supported.”
On-sea storage is used for offshore production and can be a temporary solution, but the cargo’s quality can degrade over time, whereas on-land storage is generally a more permanent solution that is easily connected to pipeline networks.
In September, oil inventories stored on land fell by 2 million barrels. Preliminary data from the International Energy Agency has indicated a further decline of almost 30 million barrels in October.
