Barclays stated on Thursday that a swift normalization of oil transit through the Strait of Hormuz aligns with its base case forecast of an average Brent crude price of $85 per barrel for 2026. However, the bank warned that any delays in restoring shipments or a further escalation of tensions could push oil prices above current levels.
Regarding the scale of supply disruptions, Amarpreet Singh, a Barclays energy analyst, noted that despite the announced US-Iran ceasefire agreement, shipping volumes through the Strait of Hormuz remain low. Recent data supports the bank's estimate that the disruption amounts to approximately 13 to 14 million barrels per day.
"However, some skepticism has emerged in the market, with certain participants citing inventory data to suggest that demand may have adjusted sufficiently to curb further price increases. We disagree with this view," Singh said.
The bank pointed out that, prior to the conflict, global inventory balances were estimated to be tighter than expected by about 1 to 2 million barrels per day. This provides ample room for demand compression under the base case scenario. Therefore, barring a broader slowdown in demand, Barclays maintains its $85 per barrel Brent crude forecast for this year and continues to see upside risks for oil prices.
In a scenario analysis, Barclays detailed in a late March report that if a Strait blockade persists until the end of April, the 2026 Brent crude forward price could be repriced to $100 per barrel. Should the disruption extend into May, prices could climb further to $110 per barrel.
The bank also highlighted that supply elasticity is structurally weaker than in previous shocks. OPEC+ spare capacity has not been fully delivered, while non-OPEC+ growth, led by the United States, is steadily decelerating due to years of underinvestment.
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