Wood Mackenzie Cuts Brent Forecast to $78 as Oil Price Bubble Deflates
According to Rigzone, Wood Mackenzie has declared the oil price bubble burst, cutting its Brent crude forecast to $78 per barrel for 2027 and projecting a potential slide to $70 per barrel by Q4 2027. The energy consultancy attributed the shift to a U.S.-Iran Memorandum of Understanding that eased fears of a prolonged Strait of Hormuz closure, after Brent averaged $92 per barrel in the first half of 2026. Wood Mackenzie warned that recovery “will take months” and that “alternating periods of elevated and depressed prices are likely.”
What It Means for Subcontractors
- E&P clients who budgeted around elevated H1 2026 prices may tighten discretionary spending in H2, putting pressure on service contract renewals and new project approvals.
- With Wood Mackenzie projecting 70% of shut-in volumes returning within three months of the Strait reopening, activity recovery will be uneven, making pipeline visibility harder for oilfield service subs to plan around.
- Price volatility is the key risk here: Wood Mackenzie’s own forecast assumes Strait transit flows normalize by August, a condition that remains uncertain given ongoing geopolitical tensions.
