Concerns about a potential oil glut may be overwrought as regional supply disruptions ease, according to Fereidun Fesharaki, chairman emeritus of energy consultancy FGE NexantECA. Speaking to CNBC, Fesharaki noted that up to 75% of historical oil flows through the Strait of Hormuz are anticipated to resume by year-end, moderating some of the tighter supply conditions that have supported prices in recent months.
Even with the recovery in crude shipments, the consultancy does not anticipate significant downward pressure on pricing in 2027. FGE NexantECA had previously forecast oil prices to settle in the upper $50s to low $60s per barrel range next year—a projection that remains plausible under current assumptions. However, the outlook hinges on geopolitical stability, with ongoing U.S.-Iran tensions unlikely to be fully resolved in the near term, sustaining underlying volatility in global energy markets.
The mixed signals underscore the complexity facing crude investors as supply and geopolitical risks continue to offset traditional demand factors. Market participants will likely remain focused on both the pace of Strait of Hormuz traffic recovery and developments in regional tensions as key indicators for 2027 price direction.