Global oil prices to stay in $90 to 110 per barrel range during 2026: Moody’s
New Delhi, May 17 :: Oil prices in the global market are likely to remain in the high range of $90 to 110 per barrel "as there is little prospect of a swift and durable settlement between the US and Iran and with it the full reopening of the Strait of Hormuz", according to a Moody’s global report on geopolitical risks.
Moody's said even if safe passage in the Strait were to resume in the next six months, the oil market would remain supply-constrained, with persistently higher and more volatile energy prices and broader knock-on effects through costs, demand and financing conditions for exposed borrowers.
"We now expect Brent crude in the $90-110 per barrel range for much of this year, with significant volatility, including occasional fluctuations outside this range in response to new developments," it said in the report.
Moody's said the transit flows will gradually improve, but through bilateral channels rather than a general reopening. This would allow some incremental improvement in energy transit flows from near-zero now, but the process will be slow, opaque and subject to interruption.
"We expect oil importers -- particularly China, India, Japan and Korea -- to negotiate passage bilaterally with Iran, potentially through coordinated transit corridors such as those reportedly emerging near Larak Island and through Omani territorial waters,” the report said.
However, the report states that a return to pre-conflict traffic volumes in 2026 is unlikely, it said.
The disruption to shipping through the Strait has become a structural supply constraint to global energy flows rather than a temporary supply shock, Moody's said, adding that it expects the disruptions to continue through autumn.
Moody's also warned that persistently higher energy prices and scarcity of energy products will feed into headline and core inflation.
Moody's expects inflation in India to average 4.5 per cent in 2026, up from 3.5 per cent in its earlier estimate.
"This will complicate the path for monetary policy across major economies, raise production costs across energy-intensive sectors, erode household purchasing power and tighten financing conditions for exposed borrowers," the report added.
Moody's said even if safe passage in the Strait were to resume in the next six months, the oil market would remain supply-constrained, with persistently higher and more volatile energy prices and broader knock-on effects through costs, demand and financing conditions for exposed borrowers.
"We now expect Brent crude in the $90-110 per barrel range for much of this year, with significant volatility, including occasional fluctuations outside this range in response to new developments," it said in the report.
Moody's said the transit flows will gradually improve, but through bilateral channels rather than a general reopening. This would allow some incremental improvement in energy transit flows from near-zero now, but the process will be slow, opaque and subject to interruption.
"We expect oil importers -- particularly China, India, Japan and Korea -- to negotiate passage bilaterally with Iran, potentially through coordinated transit corridors such as those reportedly emerging near Larak Island and through Omani territorial waters,” the report said.
However, the report states that a return to pre-conflict traffic volumes in 2026 is unlikely, it said.
The disruption to shipping through the Strait has become a structural supply constraint to global energy flows rather than a temporary supply shock, Moody's said, adding that it expects the disruptions to continue through autumn.
Moody's also warned that persistently higher energy prices and scarcity of energy products will feed into headline and core inflation.
Moody's expects inflation in India to average 4.5 per cent in 2026, up from 3.5 per cent in its earlier estimate.
"This will complicate the path for monetary policy across major economies, raise production costs across energy-intensive sectors, erode household purchasing power and tighten financing conditions for exposed borrowers," the report added.
