A week after warning of an impending global oil glut, Goldman Sachs reversed its outlook, saying renewed hostilities in the Persian Gulf now pose a risk of prolonged oil supply disruptions.
"While Middle Eastern producers have started reopening their shut-in wells over the last month, Hormuz disruptions could slow down the production recovery," the bank's commodity analysts said, reported Bloomberg on Thursday.
The bank also stated that Middle East oil production stood at 10.5 million barrels daily. The analysts elaborated that before the latest U.S.-Iran conflict escalation, oil flows had recovered to 80% of pre-war levels; however, as the situation has worsened, the recovery has come down to 70% of the pre-war level and is likely to worsen amid subdued tanker traffic.
At the time of writing, Brent crude oil price was trading 0.67% higher at $77.11 per barrel, while the WTI crude futures were trading 0.83% up at $74.12 per barrel.
Iran Reasserts Hormuz Control
Late Wednesday, Iran's Parliament Speaker Mohammad Bagher Ghalibaf reiterated Iran's stance on control of the Strait of Hormuz after recent U.S.-Iran missile exchanges, warning that American "bullying" would no longer go unanswered.
He said, "If you strike, you will get hit back," and asserted that the strategic waterway would only remain open under Iran's terms, not due to U.S. threats.
Last week, Citi analysts forecast Brent crude prices would decline to $60–$65 a barrel by the end of the year, betting that the U.S.-Iran truce will largely hold despite occasional flare-ups. They said neither side has strong incentives to break the agreement and pointed to growing "conflict fatigue" in both countries.
The analysts also noted that potential regional disruptions, including from Lebanon, are increasingly constrained by Washington's preference for de-escalation, leading them to recommend selling into oil price rallies over the summer.
Morgan Stanley also cut its oil price forecasts for 2026 and 2027 after observing that tanker traffic through the Strait of Hormuz has recovered faster than expected. The bank lowered its fourth-quarter Brent crude forecast to $75 per barrel from $80 and its end-2027 target to $70 from $80, citing a return to pre-conflict shipping levels, with 35 outbound and 15 inbound oil and gas tankers transiting the key waterway in a single day.
