Morgan Stanley left its Brent crude oil price forecasts unchanged on Monday, at $110 a barrel for the second quarter of 2026 and $100 a barrel in the third quarter, falling to $80 a barrel in 2027. The bank said it expected oil supply chains to take months to normalise even if a reopening of the Strait of Hormuz can be achieved.
Under its base-case scenario, exports through the Strait stay at low levels in April, recover about 70% of lost volumes between May and July, and return to steady-state levels by October. Oil prices climbed back above $100 per barrel on Monday, as the U.S. Navy prepared to block ships to and from Iran via the Strait of Hormuz, potentially restricting Iranian oil exports, after Washington and Tehran failed to reach a deal to end the war.
Brent crude futures were at $102.23 a barrel by 0810 GMT and U.S. West Texas Intermediate traded at $103.88. Meanwhile, Middle Eastern producers including Kuwait and Iraq have lifted Asia-bound official prices sharply for May. Saudi Arabia set the price of its Arab Light crude to Asia at a record premium of $19.50 a barrel to the Oman/Dubai average. Analysts expect the hit to global oil production to flip the oil market into a supply deficit this year, versus pre-conflict estimates of a comfortable oversupply.
(Reporting by Pablo Sinha in Bengaluru; editing by Barbara Lewis)