Standard Chartered raises 2026 Brent forecasts following Middle East turmoil

March 3 (Reuters) - Standard Chartered hiked its 2026 Brent forecasts and sees asymmetric upside risk to its projections if the Middle East conflict escalates further and impairs production from Iran or other regional producers.

The bank raised its first-quarter 2026 Brent forecast to $74 per barrel from $62, its second-quarter forecast to $67 from $63, and its 2026 average forecast to $70 from $63.50.

Brent futures LCOc1 soared about 6% to $82.38 a barrel as of 1749 GMT as the U.S.-Israel war against Iran widened, disrupting oil and gas fuel shipments in the Middle East and heightening fears of a prolonged conflict.

Israel also has attacked Lebanon, and Iran has responded with strikes against energy infrastructure in Gulf countries and tankers in the Strait of Hormuz, through which a fifth of the world's oil and liquefied natural gas typically passes.

Standard Chartered said upward price risk had been dampened by perceptions of loose market balances, but added that the tightness of spare capacity and the concentration of transit routes had come into sharper focus and it expects this theme to persist.

"The forward curve has strengthened notably, and OPEC has restarted its incremental production increases," the bank added.

OPEC+ agreed a modest oil output boost of 206,000 barrels per day for April on Sunday.