Wall Street closes at a record for the first time since end of January
Brent crude prices will remain above $90 per barrel through the end of this year as the war continues to cut off supply from the Middle East, analysts at Australia-based bank ANZ said on Tuesday.
The bank raised its 2026 estimate from previous expectations of Brent averaging closer to $80 per barrel, amid mounting supply losses and increasingly distorted supply-demand balances.
"The oil market no longer needs a worst-case escalation to justify higher pricing levels," the analysts at ANZ wrote in a research note carried by Reuters.
The tightening oil market alone is set to support Brent Crude prices around current levels even if there is no further escalation of hostilities, according to the bank.
Early on Tuesday, Brent crude traded at $98.73 per barrel, down by 0.61%, after the U.S. naval blockade of the Strait of Hormuz began at 10:00 a.m. ET on Monday.
The war has so far removed about 10 million barrels per day of crude supply. Some of this, up to 2 million bpd of the shut-ins of wells in the region, could remain offline permanently or semi-permanently due to damage to reservoirs or financial or technical constraints toward restarting, ANZ’s analysts said.
Stockpile releases could do very little to stabilize oil prices, as inventories in developed economies were already close to historically low levels before the war, according to the bank.
Even if the Strait of Hormuz opened today without any restrictions and risks, oil and gas supply from the Middle East faces recovery of several months well into the late summer, according to Wood Mackenzie.
This, of course, is contingent on an operating Strait of Hormuz.
Goldman Sachs last week warned that Brent Crude prices are set to average above $100 per barrel this year if the Strait of Hormuz remains mostly shut to tanker traffic for another month.