Oil prices can rise even with a new MoU
USO•UBS says Brent could trade between $80 and $135 per barrel across scenarios, even if a deal is reached and regional oil flows gradually normalize through the first half of 2027. Renewed disruptions or broader regional escalation could push prices toward $150 per barrel.
1. Brent outlook
UBS says a deal after the U.S. midterm elections and before year-end would not guarantee a decline in Brent crude futures. Its base case assumes negotiations return to an arrangement similar to the June MoU by year-end, allowing regional oil flows to normalize gradually through the first half of 2027.
2. Risks to supply
UBS says the path to normalization is likely to be uneven, with unresolved questions over Hormuz controls, sanctions and nuclear concessions leaving volatility in physical markets and pricing. A slower return to diplomacy, renewed disruptions to Hormuz traffic, tighter sanctions or broader regional escalation could push Brent toward the upper end of its range and potentially to $150 per barrel.
