Barclays on Thursday said that a swift normalization of flows through the Strait of ​Hormuz aligns with its ⁠forecast of Brent crude oil averaging $85 a barrel in 2026, but ‌warned that delays in restoring traffic or any further escalation could push prices higher ​from current levels. Flows through the Strait of Hormuz have stayed subdued despite the ceasefire ​announcement, and ​recent data supports their estimate of supply disruptions at around 13–14 million barrels per day, Amarpreet Singh, energy analyst at the British bank said.

"There ⁠has been some pushback however, as some market participants have been pointing to the inventory data to suggest that demand might have already adjusted enough to keep a lid on prices from here. We do not think ​so."

The bank ‌noted that ⁠estimates of global ⁠inventory balances were likely 1-2 million bpd tighter than expected going into the conflict, leaving ​more than sufficient room for some demand compression under ‌its baseline scenario.

Therefore, barring a broader slowdown ⁠in demand, it maintains its $85 per barrel view for Brent this year and still sees upside risks to prices.

Oil prices rose over 3% on Thursday as doubts over a fragile two-week Middle East ceasefire raised concerns that energy flows through the crucial Strait of Hormuz will remain restricted.

Both benchmarks fell below $100 per barrel in the previous trading session, with WTI recording its biggest decline since April 2020, on optimism the ceasefire ‌would result in reopening of the strait. But there was no ⁠sign Iran had lifted its blockade of the ​Strait of Hormuz, which has caused the worst disruption to global energy supplies in history.

Barclays still expects Brent to average $80/bbl in the fourth quarter this year ​in its baseline ‌scenario, and suggested that markets are likely largely priced ⁠for the normalization outcome.

(Reporting by Ishaan ​Arora and Swati Verma in Bengaluru Editing by Keith Weir)