Market analysts at Julius Baer are forecasting a steady decline in oil prices, projecting a slide into the $70s later this year and potentially into the $60s by 2027. Despite persistent geopolitical friction between the US and Iran and recent security concerns involving tanker attacks in the Strait of Hormuz, the firm maintains a bearish outlook. Norbert Rücker, head of economics at Julius Baer, suggests that underlying market fundamentals are healthier than many feared, with both US and global oil inventories remaining robust. This supply resilience is further bolstered by the fact that regional oil flows, despite ongoing tensions, have continued to move through key transit routes, sometimes via informal channels that are difficult for standard data tracking to capture.

While recent military skirmishes have introduced a risk premium into current pricing, expert analysis suggests this volatility may be temporary. Oxford Economics echoes this sentiment, noting that even if regional disruptions continue, producers are finding creative ways to bypass bottlenecks and restore export volumes to secure necessary revenue. With demand showing signs of cooling in parts of Southeast Asia and strategic petroleum reserves still being utilized, the market is effectively being cushioned against supply shocks. Ultimately, unless there is a significant escalation that severely damages energy infrastructure, the combination of growing supply capacity and cautious global demand is expected to keep downward pressure on oil prices for the foreseeable future.