The IMF expects the average world oil price to reach $95.74 a barrel in 2026, up 41.3 percent from 2025. It forecasts a fall to $87.39 in 2027, a decline of 8.7 percent. The fund raised its 2026 oil price forecast by 9.5 percentage points against its July projection.
The fund attributes the deterioration mainly to the Middle East war and to disruption around the Strait of Hormuz, which it says has been effectively closed. Before the conflict, about 20 million barrels a day moved through the strait. Oil peaked at $126 a barrel at the end of March, and the Dubai-Brent spread widened to $54 at its widest.
Supply and demand adjustments
Producers outside the Gulf could add about 2 million barrels a day, and global inventories roughly 4 million. The IMF says the market would still need demand to fall by 5 million barrels a day in the second quarter to balance. China’s crude imports fell 23 percent year on year between March and June.
The fund says geopolitical risk premiums and physical supply losses carry similar weight in the price rise. Geopolitical shocks’ inflation effects fade within six to 12 months. Physical disruptions push inflation higher for longer and weaken employment prospects, the IMF says.
Growth and inflation outlook
The IMF estimates the Hormuz closure alone trims 2026 global growth by 0.9 percentage points. Supply flexibility recovers 0.4 points and lower oil intensity 0.1, leaving a net loss of 0.3 points. Its baseline puts global growth at 3.1 percent in 2026 and 3.4 percent in 2027.
Global inflation is forecast at 4.7 percent in 2026, against 4.1 percent in 2025 and 2027. Gas prices are also seen rising sharply, with the IMF forecasting a 48 percent increase in the world natural gas price in 2026.
Source: IMF
