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Morgan Stanley lowered its Brent crude price forecast for the rest of the year and next, citing a faster-than-expected reopening of the Strait of Hormuz, and said market focus has shifted back to a larger surplus expected in 2027.
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The bank lowered its third-quarter 2026 forecast and fourth-quarter 2026 view to $75 per barrel from earlier estimates of $90 and $80, respectively. It sees Brent at $75/bbl in the first half of 2027 and $70/bbl in the second half, compared with an earlier forecast of $80.
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With the Middle East exports ramping up again, a supply shortfall that has been rapidly diminishing is now causing a surplus in the Brent and Dubai markets, the bank said in a note dated Monday.
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Morgan Stanley now projects an implied global oil market surplus of 4.8 million barrels per day (bpd) in 2027. At the start of 2026, before the conflict, its balances had pointed to a 2 million–3 million bpd surplus for the year and the closure of the Strait of Hormuz temporarily flipped that surplus into a deep deficit.
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To balance the market in 2027, flows through Hormuz only need to recover to 11 million-12 million bpd, or ~65% of the pre-conflict level, analysts at the bank estimated.
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This is the bank's second price reversion since the announcement of U.S.-Iran agreement to halt the war in Iran and open the Strait of Hormuz earlier this month.
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Iranian and U.S. negotiating teams were due in Doha this week, but Iran said on Monday no meeting had been scheduled as weekend missile fire from both sides tested the interim ceasefire to end the four-month-old war.
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Oil prices dipped on Tuesday and were poised for a third consecutive monthly decline, setting them for their worst quarter since early 2020.
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Brent August crude futures were down 0.9% at $72.47 a barrel, as of 0706 GMT, while U.S. West Texas Intermediate for August fell 0.5% to $70.24 a barrel.
The table below lists price forecasts after the U.S.-Iran peace deal announcement:
| Brokerage/Agency | Brent | WTI | Forecasts as of | Price Targets | ||
| 2026 | 2027 | 2026 | 2027 | |||
| Morgan Stanley | June 29, 2026 | Lowers Q3 2026 and Q4 2026 forecasts to $75/bbl; Lowers forecast from $80 to $75/bbl for 1H27 to $70/bbl in 2H27 | ||||
| Barclays | $96 ($100 previously) | $85 ($88 previously) | $90 | $82 | June 26, 2026 | Sees Brent at $100/bbl for Q3 2026 and $95/bbl for Q4 2026 |
| UBS | June 25, 2026 | Lowers Brent forecasts to $85/bbl for Q3, Q4 2026, $80/bbl for Q1, Q2 2027 | ||||
| Macquarie | $77.09 ($89.28 previously) | $64 ($74.50 previously) | $71.42 ($82.93 previously) | $60 ($70.50 previously) | June 24, 2026 | |
| J.P. Morgan | $85 ($96 previously) | - | $80 ($89 previously) | 459 ($70 previously) | June 24, 2026 | |
| Commerzbank | June 19, 2026 | Expects Brent to trade at $80/bbl by end-2026 | ||||
| ANZ | June 19, 2026 | Expects Brent to end Q2 2026 at $80/bbl | ||||
| BofA | $82 | $70 | $78 | $66 | June 17, 2026 | |
| HSBC | $95 | $75 | June 15, 2026 | Keeps forecasts unchanged | ||
| Goldman Sachs | $85 ($90 previously) | $75 ($80 previously) | $80 ($85 previously) | $70 ($75 previously) | June 15, 2026 | |
| Citi | $81 | $65 | $76 | $61 | June 15, 2026 | New quarterly oil price forecasts at 3Q26/4Q26/2027 $75/bbl, $70/bbl, and $65/bbl, and sees Brent at $60/bbl by 1Q27 |
(Reporting by Swati Verma in Bengaluru; Editing by Sherry Jacob-Phillips)
