We still expect the price of a barrel of Brent to drop back to around $85 next year, despite threats of a complete halt to Iranian oil exports. Our forecast would also be well below the “fair price” of $100 suggested by Saudi officials, but this informal target has already shown itself to be ineffective either as a ceiling or a floor. And over the longer term, booming supply from unconventional sources should maintain the downward pressure on oil prices even when the world economy picks up again.
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