UBS Lifts PetroChina, CNOOC Targets as Brent Forecast Hits $72

UBS Raises 2026 Brent Forecast to $72 on Hormuz Supply Shock

UBS has significantly revised its 2026 average Brent crude oil forecast, increasing it by $10 to $72 per barrel. The upgrade on March 4 stems from the near-total closure of the Strait of Hormuz, a critical waterway for global energy supplies, caused by escalating geopolitical conflict. The bank's analysis also lifted the first-quarter 2026 forecast to an average of $71 per barrel, implying prices could reach approximately $80 in March. This revision reflects a volatile market where Brent crude was already trading near $82.32 per barrel, its highest level since January 2025.

PetroChina and CNOOC Price Targets Lifted Over 10%

The bullish oil price outlook directly prompted UBS to raise its price targets for key Chinese energy producers, which remain the bank's top industry picks. PetroChina's (00857.HK) target was increased by 10% to HKD12.6, while CNOOC's (00883.HK) was lifted 12% to HKD33.6. These revisions are supported by higher earnings projections for 2026, with UBS forecasting a 13% increase for PetroChina to RMB183.3 billion and a 16% rise for CNOOC to RMB148.1 billion. Other regional energy firms also received upgrades, with China Oilfield's (02883.HK) target price raised by 11% to HKD12.

Oil Could Exceed $100 if Conflict Escalates

While the bank's base case assumes the conflict will last several weeks, its analysis outlines scenarios where prices could climb much higher. UBS warned that direct strikes on regional energy infrastructure could push Brent above $90 per barrel. A prolonged closure of the Strait of Hormuz, which is currently experiencing shipping paralysis, could potentially drive prices past the $100 per barrel mark. Despite these near-term risks, UBS has kept its longer-term forecasts for 2027 and 2028 unchanged at $70 and $75 per barrel, respectively, but acknowledged that risks are clearly skewed to the upside.