Chevron Faces Tight Market as BofA Forecasts 4mbd Deficit, $92.50 Brent on Strait of Hormuz Disruption
BofA forecasts a 4 mb/d Q2 2026 oil supply deficit and raises Brent crude to $92.50 per barrel, warning that flows via the Strait of Hormuz collapsed from 20 mb/d to under 2 mb/d. Persistent disruptions could force a 4-5% global energy demand contraction, risking price volatility and supply rationing.
1. Hormuz Choke Threatens Oil Flows
Global oil movements through the Strait of Hormuz plunged from about 20 mb/d to under 2 mb/d, constricting Chevron’s access to Gulf-crude exports and disrupting established shipping routes.
2. BofA Raises Price Forecasts
BofA Global Research now anticipates a 4 mb/d supply deficit in Q2 2026 and has lifted its Brent crude average to $92.50 per barrel, underpinning a stronger revenue outlook for Chevron’s upstream segment.
3. Risk of Demand Rationing and Volatility
Prolonged disruptions could force a 4%-5% drop in global energy demand and trigger extreme price swings, potentially weighing on Chevron’s downstream sales volumes and profit stability.
4. Limited Offsets Heighten Logistics Challenges
With Saudi and UAE pipeline capacity already stretched, Chevron faces tight alternatives for rerouting crude, which may strain refining throughput and export margins if maritime security remains unsettled.