Following Goldman Sachs' recent upward revision of its year-end oil price forecast, Francisco Blanch, Head of Commodities and Derivatives Research at Bank of America, has joined the chorus, projecting that Brent crude will hover around $90 per barrel this year. As the crisis in the Strait of Hormuz remains deadlocked, a trading strategy betting on "No Alternative to a Closed Hormuz" (NACHO) is gaining significant popularity on Wall Street.
In a Bloomberg interview on Monday, Blanch warned that the global oil market is currently facing a "fairly substantial supply deficit," with a daily shortfall of 14 to 15 million barrels, equivalent to 14-15% of demand. He stated that oil prices could only retreat to the $60-$70 per barrel range if this deficit is filled. On Monday afternoon, Brent crude futures briefly rose above $112.
Blanch's latest forecast is centered on the core assumption of a persistently blocked Strait of Hormuz. He issued a more severe warning: if the dual blockade continues, oil prices could gradually climb to $120-$130 per barrel by late June to early July. This prospect is fueling widespread concern in the market about fuel supply for the U.S. summer driving season.
A Wall Street consensus is forming, with $90 per barrel becoming the benchmark year-end forecast. Goldman Sachs analysts led the way in late April by raising their fourth-quarter price targets to $90 for Brent and $83 for West Texas Intermediate (WTI), nearly $30 higher than their pre-Hormuz disruption forecasts. Bank of America's alignment further solidifies this price expectation as a consensus among major institutions.
The logic behind both banks' forecasts is highly consistent: the Hormuz crisis is unlikely to be resolved soon, and global crude supply will remain under pressure. Blanch noted that restoring tanker traffic is the optimal outcome, but currently, the Trump administration shows no willingness to make any concessions to Tehran, and the stalemate has persisted for weeks.
A critical juncture is approaching, with multiple sources warning that June could be the "tipping point." Frederic Lasserre, Head of Research at Gunvor, one of the world's largest oil traders, warned last week that "the tipping point is clearly June, when something has to give." JPMorgan analysts recently cautioned that four more weeks of a blocked Strait of Hormuz would lead to a catastrophic, cliff-like shortage of crude oil globally. Maersk CEO Vincent Clerc characterized a prolonged Hormuz closure as a "new warning," stating it could severely impact global trade. Former CIA officer and RBC Capital Markets' Head of Commodity Strategy, Helima Croft, recently told clients she is highly skeptical of achieving a full reopening or a return to February 27th tanker traffic levels by June, suggesting a near-term reversal is highly unlikely.
Pressure is mounting on the consumer end, with U.S. gasoline prices nearing a demand-destruction threshold. According to the latest AAA data, the national average price for regular unleaded gasoline has reached $4.55 per gallon. Analysts point out that if the Hormuz crisis is not resolved soon, further oil price increases could push gasoline prices toward the $5-per-gallon demand-destruction line, a timing that coincides with the U.S. Memorial Day driving season peak. Blanch specifically highlighted the potential for "supply tightness" in U.S. fuels this summer. Given the current scale of the supply-demand gap, any further deterioration in the geopolitical situation could accelerate a breakout of oil prices into even higher ranges.
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