Bank of America analysts raised their forecast for Brent crude in the second half of the year to $95 a barrel, up from $83, citing ongoing disruptions to global energy supplies driven by the widening conflict in the Middle East.
In a note issued Monday, the bank pointed to estimates that disruption to oil shipments through the Strait of Hormuz had reached roughly 14 million barrels per day — a level far above pre-war averages of 4 million to 8 million barrels per day. Before the conflict began, approximately one-fifth of the world’s oil and liquefied natural gas passed through the strait.
Iran effectively shut the strait shortly after the United States and Israel launched a joint assault on the country in late February. While fighting between Washington and Tehran has stalled in recent weeks, diplomatic prospects have brightened around the United Nations General Assembly session underway during the week of the report. A media report indicated Iran had offered to reopen the strait within seven days in exchange for a de-escalation of U.S. military pressure.
Brent crude futures sank below $100 a barrel on Tuesday, having topped that level for several days amid fears the Iran war was expanding into a broader regional conflict. Saudi Arabia has relied on the Bab el-Mandeb Strait to move its crude to global markets since Iran closed Hormuz, while separate attacks have disrupted a key east-west pipeline transporting energy products across the kingdom.
Despite the disruptions, satellite data cited by Reuters showed Saudi Arabia’s six-day average for crude shipments through Hormuz rose sharply from August levels, suggesting some incremental flow may be returning.
