Banks Slash Oil Price Forecasts After U.S.-Iran Breakthrough

Key Points:

• Morgan Stanley and Goldman Sachs have lowered their oil price forecasts for late 2026 and 2027 following progress in U.S.-Iran peace negotiations, anticipating increased oil exports through the Strait of Hormuz.
• Morgan Stanley now projects Brent crude prices at $80 per barrel in Q4 2026 and $90 in Q3 2026, down from a prior forecast of $100 per barrel for Q3, citing potential conflict de-escalation and resumed tanker flows.
• Goldman Sachs cut its Q4 forecast to $80 per barrel from $90 and its 2027 average to $75 per barrel from $80, expecting full recovery of tanker traffic through the Strait of Hormuz by late July.
• Citi adopts a more bearish stance, reducing its Brent crude forecast to $75 per barrel in Q3 2023 and $65 per barrel in 2027, down from $80 per barrel previously, reflecting concerns over sustained price pressures.
• Brent crude prices fell to their lowest since early March amid news of a preliminary U.S.-Iran deal to reopen the Strait of Hormuz within 30 days, with Brent trading below $90 and WTI near $80 per barrel.