LONDON (ShareCast) - (Sharecast News) - Morgan Stanley has lifted its oil price forecast, in response to fresh sanctions on Russian oil majors and moves by Opec+ to rein in production hikes.
In a note published on Monday, the Wall Street bank raised its 2026 interim Brent estimate to $60 per barrel from $57.50.

It attributed the "modest" increase to both sanctions and a decision over the weekend by Opec+ to pause quota hikes during the first quarter of 2026.

Opec+, which includes de facto leader Saudi Arabi and ally Russia, attributed the decision to traditionally lower demand after the holiday season.

But a number of producers, along with the International Energy Agency, increasingly expect a major production glut in 2026, after the oil cartel steadily increased output throughout 2025.

Both the US and European Union also moved last week to weaken Moscow with a series of fresh sanctions.

The White House confirmed it would impose sanctions on Rosneft and Lukoil, Russia's biggest oil companies, while the EU's latest package included a ban on liquified natural gas imports.

Morgan Stanley said: "We estimate a substantial surplus in the oil market in 2026, especially in the first half.

"With that prospect in mind, we still expect prices to soften into early next year. Without any Opec counter-measure, the downside risk would inevitably be larger.

"However, with Opec involvement, volatility is reduced."

It concluded: "The decision to halt quota hikes during the first quarter does not materially change our production forecasts, but still sends an important signal - that is, the group is still adjusting supply in response to market conditions.

"Together with recent sanction news, we make a small upward adjustment to our price forecast."

As at 1130 GMT, Brent was trading at $64.48.

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