Oil Retreats from Peak; Is Brent Heading Toward US$150?

Global oil prices underwent a correction during trading on Monday (October 26, 2026), following a sharp rally that had pushed them to their highest levels in six months. Brent crude for December delivery fell 1.1% to US$115.48 per barrel as of 8:01 a.m. Singapore time, while West Texas Intermediate (WTI) weakened by 1.2% to US$102.05 per barrel. This decline occurred as investors began to reassess developments in the Middle East conflict and adjust their positions following significant price gains throughout the previous week.

From a technical perspective, Brent crude has begun to show signs of being "overbought." The 14-day Relative Strength Index (RSI) surpassed 74 on Friday—exceeding the 70-level threshold, which typically signals an increased risk of a price correction. Nevertheless, the overall upward trend for oil remains robust. Throughout 2026, Brent prices have surged by approximately 90% as the conflict in the Middle East has disrupted energy distribution and heightened concerns regarding the security of global oil supplies.

Geopolitical uncertainty remains the primary factor preventing a sharper decline in oil prices. U.S. President Donald Trump has indicated that Washington is nearing a decision point—either reaching an agreement with Iran or potentially resorting to military action. Meanwhile, Iranian Foreign Minister Abbas Araghchi has suggested that further conflict could be avoided if the United States takes a rational approach. Tensions have also escalated following a claim by the Houthi group that they attacked King Khalid International Airport in Riyadh in retaliation for Saudi Arabian strikes in Yemen. These circumstances keep investors focused on the risk of supply disruptions, even as oil shipments through the Strait of Hormuz are reportedly beginning to recover toward pre-war levels. Market attention is currently focused on several key political and economic events, including the Israeli elections on October 27, the Federal Reserve meeting on October 27–28, and the United States midterm elections on November 3. Market participants assess that the risk of escalating conflict could rise following the U.S. elections, suggesting that oil prices may remain high even as distribution begins to improve. Vivek Dhar, an analyst at the Commonwealth Bank of Australia, has even projected that Brent crude could reach US$150 per barrel in an extreme scenario—one that would force developing nations in Asia to curtail energy consumption due to prohibitively high costs.

Looking ahead, oil prices are expected to remain highly volatile as the market grapples with two opposing forces: the recovery of oil distribution and the persistent threat of conflict. Should U.S.-Iran diplomacy show progress and supply chains remain stable, Brent prices could see further downward correction. Conversely, any new attacks on energy infrastructure or shipping lanes could trigger another price surge. Furthermore, if oil prices remain above US$115, they risk exacerbating global inflationary pressures, posing a challenge for central banks as they determine the direction of interest rates.