Morningstar Holds $65 Brent Forecast as Limited U.S. Strike Keeps Oil Surplus
Morningstar's equity director projects a limited U.S. strike on Iranian targets as the most probable scenario, keeping global oil flows unaffected and a surplus intact. The firm maintains its $65-per-barrel midcycle Brent forecast despite Brent futures climbing nearly 20% year-to-date to about $72.
1. Morningstar's Base Case on Iran
Morningstar’s equity team views a limited U.S. strike on Iranian military or nuclear assets as the most likely outcome, which would leave physical oil flows uninterrupted and maintain the current global supply surplus.
2. Brent Price Trends and Forecast
Brent futures have surged nearly 20% since early January to trade around $72 per barrel, yet Morningstar retains its $65-per-barrel midcycle forecast, signaling belief that underlying supply–demand fundamentals will reassert themselves.
3. Drivers of the Outlook
Key drivers include U.S. political incentives ahead of midterm elections, availability of Venezuelan heavy-sour crude as a buffer, limited appeal of a severe strike that could strengthen OPEC+, and a low probability of a Strait of Hormuz closure.