How high will oil (WTI) get by Dec 31, 2026?

rationale:

As of June 19, 2026, none of the WTI front-month settlement thresholds have been breached. The resolution criteria strictly measure the front-month settle price, rather than intraday highs. During the peak of the spring 2026 Iran/Strait of Hormuz crisis, the highest realized WTI settlement was $112.95 on April 7 financemagnates.comfinance.yahoo.comcnbc.com, despite intraday spikes reaching near $117 finance.yahoo.comreuters.com. Following the recent US-Iran interim ceasefire and the conditional reopening of the Strait of Hormuz, WTI has collapsed roughly 21% over the past month, returning to the mid-to-high $70s cnbc.comtradingeconomics.com.

Our base case assumes continued de-escalation and a structural crude oversupply returning to the market. Assuming the reopening holds, WTI is expected to trade mostly in the $65–$90 range for the remainder of the year. This aligns with fundamental forecasts, including Goldman's Q4 WTI estimate of ~$75 boereport.com and BofA's expectation that Brent will trade between $70 and $80 in H2 2026 boereport.com.

However, significant tail risks justify a 29% probability of crossing the initial $115.01 threshold. The current truce is highly fragile, characterized by postponed talks, transit fee disputes, and lingering physical risks in the strait reuters.comreuters.com. Crucially, the spring supply disruption caused massive global inventory draws—6.3 million b/d in Q2 and an estimated 7.6 million b/d in Q3—leaving OECD inventories at their lowest levels since 2003 eia.gov. If the ceasefire collapses, these severely depleted inventories will amplify any renewed price shock, potentially driving prices higher and faster than the initial crisis (a dynamic that led Rystad to flag an extreme $180 re-escalation scenario cnbc.com).

Despite these upside risks, the probabilities decay steeply for the extreme thresholds ($150+ to $200+). A full closure of the Strait of Hormuz and direct military conflict during the spring only pushed WTI settlements to ~$113. Breaching $150, let alone $180 or $200, would require an unprecedented compounding of shocks significantly worse than what the market has already absorbed. Furthermore, price spikes of that magnitude would face severe headwinds from immediate demand destruction and aggressive, coordinated Strategic Petroleum Reserve (SPR) releases. Consequently, while we price a meaningful chance of a secondary spike above $115 to $130, the likelihood of sustained settlements pushing into the $180–$200 range is firmly constrained to low single digits.