IMF Oil Price Forecast: Will It Reach $130?

IMF Oil Price Forecast: Will It Reach $130? At a Glance: The IMF estimates the average oil price at $95.74 per barrel for 2026 and $87.39 for 2027, which could climb to $130 if the conflicts continue. Facing the closure of the Strait of Hormuz: despite disruption to a key artery […]

Oil price forecast: The International Monetary Fund has estimated the average price of oil in 2026 to be $95.74 per barrel and for 2027 to be $87.39 per barrel, which can rise to $130 per barrel under the scenario of continued conflicts.

Confronting the blockage of the Strait of Hormuz: Despite the disruption in the key highway of the Persian Gulf, changing the export route, increasing production outside the region and daily withdrawal from global reserves has been able to compensate for part of the supply deficit.

Inflation outlook and crisis scenario: In the scenario of the continuation of conflicts until the middle of 2027, the reduction of OPEC production and disruption in the energy market can raise costs and increase global inflation in 2027 by 1.1 percentage points.

The International Monetary Fund predicts that oil prices will continue to rise through 2026 and 2027, with the trajectory linked to the duration of the war in the Middle East and the speed with which reserves recover.

In this analysis, the baseline scenario assumes that average prices rise to $95.74 per barrel in 2026, and then stabilize at $87.39 the following year, representing increases of 7.2 percent and 11 percent, respectively, compared to the previous forecast in July 2026.

A report published by the International Monetary Fund states that if the conflict continues, oil prices could rise to $130 per barrel.

Also, the fund estimates that supply flexibility and reduced reserves have limited the impact of the closure of the Strait of Hormuz, but the possibility of an escalation remains the main risk factor for rising prices and slowing global growth.

These projections are based on the assumption that shipping through the Strait of Hormuz will resume in March 2027 and that conditions will return to pre-war levels by October of that year.

International Monetary Fund's forecast of oil prices

According to the International Monetary Fund, oil prices averaged $67.74 per barrel in 2025 and could rise to $95.74 in 2026, representing an annual increase of 41 percent. This estimate is about $6.50, or 7.2% higher than the July 2026 forecast of $89.27 per barrel.

The fund expects prices to average $87.39 a barrel in 2027, down 8.7 percent from 2026, but still higher than the July 2026 forecast of $78.70 a barrel.

This report pointed to the crisis of closing the Strait of Hormuz, which before the start of the war, used to pass through about 20 million barrels of oil daily, which is equivalent to about a quarter of the world's maritime oil trade. In recent months, the blockage of the waterway has disrupted supplies, but the diversion of some exports from Persian Gulf producers to other ports and an increase in production outside the region by about two million barrels per day have helped limit the loss.

Drawdowns from global reserves also provided roughly 4 million bpd, but market balance in the second quarter of this year required demand to fall by about 5 million bpd at a time when prices were rising.

In China, the world's largest importer of crude oil, imports between March and June 2026 fell by 23 percent compared to the same period last year, due to the drawdown of domestic reserves and lower consumption of refined petroleum products.

The effect of supply flexibility on economic growth

Closing the Strait of Hormuz without a flexible response on the supply side would increase average oil prices to about $110 per barrel in 2026 and reduce global economic growth by 0.9 percent, the IMF report added.

However, the change in the direction of oil supply in the Persian Gulf, the increase in production in other regions and the decrease in reserves have helped to reduce the price of oil to an average of 85 dollars per barrel and reduced its negative impact on economic growth to 0.4%.

Over the past two decades, energy consumption per dollar of global GDP has declined by 32 percent, while renewable energy sources have accounted for about 60 percent of the total increase in electricity generation since 2010.

$130 per barrel scenario

Another IMF scenario is based on the fact that the Persian Gulf conflict will continue until the end of June 2027, the Strait of Hormuz and Bab al-Mandeb will remain closed, damage to oil infrastructure will continue and supply recovery will be delayed until the end of the year.

Under this scenario, OPEC oil production would decrease by 10 percent in 2026 compared to the baseline scenario, and by approximately 22 percent in 2027, before returning to normal levels in 2028.

In this scenario, oil prices will reach $130 per barrel from the fourth quarter of 2026 to the first quarter of 2027.

This figure will increase by an average of 17% in 2026 and 40% in the next year compared to the base scenario. Finally, it will return to its previous levels by the fourth quarter of 2027.

The impact of this scenario extends to the global economy as well, so that economic growth in 2026 will decrease by approximately 0.2% and in 2027 by 0.5% compared to the base scenario.

The report attributed about two-thirds of the negative impact to disruptions in the oil and gas markets, which increased energy costs and put pressure on household purchasing power and investment returns.