Live Markets: Oil prices can rise even with a new MoU

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06/10/2026 12:11

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OIL PRICES CAN RISE EVEN WITH A NEW MOU
Oil prices remain under the spotlight as markets assess the impact a prolonged shock could have on growth and inflation.
Meanwhile, UBS argues that even if a deal is struck after the US midterm elections and before year-end, a decline in Brent crude futures cannot be taken for granted.
“Under our base case, we assume that negotiations ultimately move back towards a similar arrangement to the June MoU by the end of the year, allowing for a gradual normalisation of regional oil flows through first half 2027,” UBS says in a research note.
The normalisation path is likely to be uneven, it adds, as unresolved questions over Hormuz controls, sanctions, nuclear concessions and other issues leave considerable volatility in both physical markets and pricing.
Bottom line, while UBS's base case assumes a gradual recovery in flows and easing tensions, it also sees Brent trading in an $80 to $135 per barrel range across scenarios, compared with around $98 currently LCOc1.
However, a slower return to a diplomatic framework, renewed disruptions to Hormuz traffic, tighter sanctions or broader regional escalation could push prices towards the upper end of their range and potentially to $150 per barrel.
(Stefano Rebaudo)
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