Brent steadies near $89 as Hormuz deadlock backs $96 forecast

Oil steadied near $89 a barrel as hopes for a quick reopening of the Strait of Hormuz faded, with Barclays holding its 2026 Brent forecast at $96.

"Hopes of an imminent deal to resolve the Strait of Hormuz impasse have faded of late, as the U.S. and Iran have been digging in on their positions," said Amarpreet Singh, commodities analyst at Barclays.

Front-month Brent crude rose 0.2 percent to $88.72 a barrel, while front-month West Texas Intermediate crude traded flat at $82.39. Both benchmarks were on track for weekly gains of 6.0 percent and 5.4 percent, respectively, after crude futures climbed $1 a barrel Friday. The average U.S. price of a gallon of gasoline stood at about $4.08, up 29 percent from a year earlier, according to the American Automobile Association.

The standoff carries outsized stakes for global supply: the strait handled more than 130 ships a day before the war, and ship-tracking firm Kpler counted just two vessels transiting Friday with no crude shipments visible. Barclays' $96 forecast for 2026 implies further upside from current levels if the blockade persists, while a collapse of talks or renewed military action could push prices sharply higher.

Iran Holds the Line as Washington Presses

Iran has shown no sign of yielding. Deputy Foreign Minister Kazem Gharibabadi said the strait "will be opened and closed only under Iran's command," while Foreign Minister Abbas Araqchi said Tehran had not decided to resume talks and that Washington must meet conditions on the waterway for shipping to resume. President Donald Trump, who campaigned on lowering energy costs, told a rally in Garden City, New York, that paying "a tiny little bit more for your gasoline" was worth preventing Iran from obtaining a nuclear weapon, and pledged to declare the strait a U.S. territory after defeating Iran.

The last time the strait faced a sustained closure threat, after tanker attacks in 2019, Brent spiked before retreating within weeks as supply from other producers filled the gap. This blockade has cut off a waterway that carried one-fifth of the world's oil before the war, a scale of disruption with no recent precedent. Treasury Secretary Scott Bessent said more measures against Iran were coming next week, while Tehran blamed high inflation on the U.S. blockade of Iranian ports and sanctions on its oil exports.

Supply Risk Keeps the Premium in Place

With no crude vessels transiting the strait, the market has priced in a persistent supply risk. The UAE accused Iran of attacking a third vessel operated by Abu Dhabi National Oil Company on Friday, after two earlier incidents involving ADNOC ships, while the U.K. Maritime Trade Operations Centre reported a bulk carrier struck in the hull by an unknown projectile. Renewed attacks by Iran-backed Houthis in Yemen, including six ballistic missiles fired at the Red Sea port of Mocha that killed four civilians, have widened concerns about a regional conflict.

For traders, the question is how long the premium holds. Barclays' $96 Brent forecast for 2026 sits roughly 8 percent above current levels, implying the bank expects the disruption to persist through next year. If talks resume and the strait reopens, prices could give back the geopolitical premium quickly; if the standoff hardens into renewed military action, the upside could be sharper than the forecast implies.

This article is for informational purposes only and does not constitute investment advice.