Inventories are falling and geopolitical risks are escalating. Oil prices will most likely continue to trade in a high, volatile range going forward, and $96 is only a conservative estimate.

The Canadian Export Development Agency said that global oil inventories have continued to decline, making the market more fragile. It expects this year’s average oil price to be around $96 per barrel, and around $84 in 2027. Global oil storage facilities have become the marginal producer. If a permanent agreement is reached to end the war and restore shipping through the Strait of Hormuz to pre-crisis levels, it would help ease supply tightness, but the market will still be tight; rising geopolitical risks will trigger price volatility.