National Bank of Ukraine increases forecast for average Brent crude price in 2026 by 36.1% to $86.4/barrel

MOSCOW. May 8 (Interfax) - The National Bank of Ukraine (NBU) has increased its forecast for an average price for Brent crude oil in 2026 by 36.1%, or by $22.9 per barrel, to $86.4 per barrel, Ukrainian media reported citing the NBU's Inflation Report for April 2026.

"The oil price shock is expected to start gradually fading at the end of Q2 2026 as tensions in the Middle East ease and logistics capabilities improve accordingly," the NBU said.

The NBU's baseline forecast scenario anticipates an average price for Brent crude to be $100 per barrel in Q2 2026 and to decline to $80 per barrel by the end of the year. The regulator cited weakening global demand due to high prices and significant stockpiles in major importing countries, particularly China, as an additional factor for a price decline.

Compared to its January forecast, the NBU also increased its average Brent price estimate for 2027 by 14.1% to $75.1 per barrel, while maintaining its 2028 forecast unchanged at $68.1 per barrel.

The NBU noted that despite the expected decline, oil prices will remain relatively high until at least 2027 due to the need to repair some damaged facilities, and then will gradually stabilize owing to growing production.

The NBU's alternative scenario assumes that, if the war in the Middle East continues at least until the end of 2026, oil prices might grow to $150 per barrel in Q2 and go down to $100 per barrel in Q4.

Global oil prices quickly translate into domestic price pressure due to Ukraine's high dependence on fuel imports. According to the NBU, fuel prices on Ukraine's domestic market increased by 36% YoY in April, significantly exceeding the January forecast of a 9% increase YoY. The direct contribution of more expensive fuel prices to annual inflation in April was 0.9 percentage points.

According to NBU calculations, if the conflict in the Middle East is brought to an end soon enough, inflation in Ukraine in 2026 could be 1.5 percentage points higher, and GDP growth could be 0.3 percentage points lower owing to higher oil prices. If the war lasts longer, its additional contribution to inflation would increase to 3 percentage points, and the negative impact on GDP growth would reach 0.6 percentage points.

At the same time, the Middle East events are likely to increase the value of foreign trade, the NBU said. If the war ends relatively soon, Ukraine's exports of goods could increase by $0.6 billion and imports by $1.5 billion, and in the event of a protracted war, they might grow by $1.6 billion and $3.2 billion, respectively, it said.