-
Wall Street is raising its 2027 oil forecasts with a quick return to normal looking less and less likely.
-
The longer crude stays elevated, the more pressure builds on consumers, inflation, bonds, and stocks.
-
Sign up for First Trade, Business Insider’s daily markets newsletter.
Around the time Ben Shelton was polishing off his US Open victory over Carlos Alcaraz in the wee hours of Wednesday morning, the price of oil was making some waves of its own, climbing back above $100 per barrel.
The break into triple digits was weeks in the making. After falling below $80 in early August, oil has been on a mostly uninterrupted climb higher. Any optimism traders have around an Iran-war resolution has fizzled. They’re now (re)pricing for a prolonged disruption.
But while $100 is an important psychological milestone, a deeper shift is occurring across Wall Street. There’s a growing recognition that the global oil shock may not fade as quickly as investors once hoped.
A forecast reset
Perhaps the most drastic reaction to oil’s latest spike came from HSBC, which lifted its 2027 Brent forecast by a whopping $20, to $85. The firm’s base case is that Strait of Hormuz flows will recover only gradually, continuing the ongoing supply squeeze.
Then there’s Goldman Sachs, which raised its 2027 forecast to $80, while also flagging a worst-case scenario of $120 oil where Gulf output remains suppressed.
Not to be outdone, Bank of America said continued Middle East conflict could put oil in a $95-to-$120 range, with $150 a possibility if energy infrastructure is damaged further.
Even if those forecasts remain below oil’s current price, Wall Street is now treating triple-digit crude as a realistic outcome rather than a remote risk.
Why “higher for longer” is gathering steam
Three forces are combining to sustain the ongoing oil shock. First, the Strait of Hormuz — despite occasional signs of progress — is still operating well below normal capacity.
Second, the oil stockpiles being used to cushion the blow to prices are getting thinner with every delayed shipment.
And finally, while workarounds and new routes have offered relief, they haven’t helped enough to avoid a full-blown supply crisis. The old normal is far from being restored, and may never be.
The stakes for everyday people
A prolonged stretch of $100-plus crude oil impacts consumers well beyond the gas pump (although that certainly hurts too). It also means higher prices for diesel, jet fuel, and shipping, which can eventually touch nearly everything people spend money on: groceries, deliveries, flights, and utilities, just to name a few.
Higher-for-longer oil also threatens the market’s preferred economic storyline. Investors have spent much of 2026 betting that inflation would ease without a major hit to growth. Persistently high energy prices could upset that delicate balance, keeping bond yields elevated and making the Fed’s next move even more complicated.
For stocks, the concern is simple: Higher energy costs can squeeze both household budgets and corporate profits at the same time. These worries have already rattled equities. And if the situation continues, everyday people will feel the pinch everywhere from the shopping aisle to their retirement portfolios.
If you enjoyed this story, be sure to follow Business Insider on Yahoo.
