BofA hikes Brent price forecast on prolonged Middle East supply disruptions
XLE•Other banks also lifted forecasts
Banks including Goldman Sachs, Bank of America, and Commerzbank raised their Brent price forecasts earlier this month, as persistent disruptions to Middle East shipping tightened oil markets and drove crude prices to multi-week highs.
BofA raises Brent forecast on prolonged tensions
Bank of America raised its Brent crude oil price forecast for the second half of 2026 to $95 a barrel from $83, saying prolonged geopolitical tensions through the end of the year were now its base-case scenario.
While alternative routes and escorted shipments through the Strait of Hormuz have mitigated some of the shortfall, damaged infrastructure and heightened geopolitical tensions make a rapid recovery unlikely, the bank said in a note dated Monday. It expects Brent to average about $80 a barrel in 2027.
Further disruption could push prices sharply higher
BofA said that if disruptions persist into spring 2027 or damage to oil infrastructure worsens, front-month Brent contracts could spike well above $150 a barrel to curb global demand.
Shipping route concerns ease after comments and pipeline restart
Meanwhile, oil prices fell after an Iranian official said the country could reopen the Strait of Hormuz within seven days if the U.S. takes initial steps to ease military pressure, easing concerns over disruptions to a key global oil shipping route.
Additionally, Saudi Arabia has restarted operations at its East-West Pipeline and could resume exports from the Red Sea port of Yanbu later on Tuesday, three sources briefed on the matter said.
