Higher for Longer: Why Oil Prices Are Headed Higher Despite Current Headlines

Oil markets are funny things. Headlines scream one direction, but the fundamentals—those stubborn realities of supply, demand, and inventories—have a way of reasserting themselves.

That’s exactly what Enverus Intelligence Research’s latest Fundamental Edge report, “Let’s Make a Deal,” makes clear. While traders chase peace-deal euphoria and fret over tweets, the data points to Brent crude settling in around $110 per barrel in the second half of 2026, with $105 in 2027. That’s a sharp upgrade from their prior $95 call, and it’s grounded in something far more reliable than the daily news cycle: persistently low global inventories.

Enverus models a scenario where a U.S.-Iran peace deal lands by the end of June, cracking open the Strait of Hormuz. Markets might sell the headline initially—peace is supposed to mean more supply, right? But the ramp-up won’t be like flipping a switch to light up the living room. Flows today sit at roughly 2 million barrels per day. Even in the best case, they climb gradually to 16 million by 2027, still shy of the pre-war 20 million. Some rerouted barrels will likely stay rerouted.

The result? OECD inventories hover well below pre-crisis cushions. That level, per Enverus’ long-term stock-to-price correlations, supports triple-digit Brent.

So, why does the Brent price currently hover in the low 90s? Al Salazar, the report’s author and director at EIR, put it succinctly in our conversation: Financial markets are “highly headline driven.” Traders are gun-shy about calling a bull market, knowing any spike risks a bearish Truth Social post by President Trump. But fundamentals tell a different story. Low stocks are drawing down further amid a flow issue that doesn’t vanish overnight. “Whenever you fix the flow issue,” Salazar notes, “you’re still left with low stocks. And that drives the higher-for-longer thesis.”

This is simple math, not speculation. Enverus sees cumulative stock draws keeping cushions thin even as Persian Gulf barrels gradually return. A modest level of demand destruction helps moderate things, but not enough to refill inventories quickly. Strategic reserve refills add another layer of price support.