Although Middle East crude exports have picked up, progress toward ending the Iran war has stalled, leaving the market still exposed to the risk of fresh supply shocks.
Because negotiations to end the Iran war have reached an impasse and the market faces the risk of supply disruptions, major Wall Street banks have raised their oil price forecasts.
Since talks to end the Iran war have stalled and the market remains at risk of new supply shocks even as Middle East crude exports recover somewhat, leading Wall Street banks have lifted their oil price projections for this year and early next year.
A survey compiled by the media, including forecasts from Goldman Sachs, JPMorgan and Morgan Stanley, shows that Brent crude is expected to average $90.22 per barrel in the fourth quarter, while West Texas Intermediate (WTI) is projected at $85.47 per barrel.
Both figures are significantly higher than the previously estimated $78.92 and $74.62 per barrel, respectively.
On Wednesday, oil prices rebounded amid persistently escalating tensions in the Middle East. November Brent crude futures rose 0.8% to $103.45 per barrel, while the more active December contract climbed 2.5% to $98.61 per barrel. Front-month WTI futures gained 1.9% to $91.10 per barrel.
According to data provider Kpler, crude supply conditions have improved, with Middle East crude exports excluding Iran returning to pre-war levels. Saudi Arabia has also resumed shipments through its East-West pipeline after repairing damage from drone strikes, easing regional supply pressure.
However, the diplomatic path to reopening the Strait of Hormuz and resuming negotiations on Iran's nuclear program remains uncertain, leaving the market exposed to the risk of renewed disruptions.
Meanwhile, tight conditions in the spot market have heightened inflation risks and sparked discussions about possible export restrictions. The market is worried that the United States may ban diesel exports, while analysts expect Russia to extend diesel export restrictions for another month.
For the full year, the media survey forecasts Brent and WTI to average $88.13 and $82.98 per barrel, respectively. In the first quarter of next year, analysts expect Brent to fall back to $83.44 per barrel and WTI to $79.88 per barrel.
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