Oil tankers are moving through the Strait of Hormuz faster than Morgan Stanley analysts had expected.
The Strait of Hormuz is reopening faster than expected, oil analysts at Morgan Stanley said as they cut their oil-price view for this year and next.
Strategists led by Martijn Rats, in a note published late Monday, cut their fourth-quarter Brent oil forecast to $75 from $80 and their end of 2027 prediction to $70 from $80.
Separately, Morgan Stanley cut their outlook on European energy companies to in-line from attractive.
Front-month Brent (BRN00) eased 15 cents to $73.76 a barrel, down 38% from its intraday high of $119.50 reached in early March. The WTI (CL00) contract was trading at $70.59 per barrel.
Rats and team note that 35 outbound oil and gas tankers transited the contested waterway last Thursday, the first time the number was back into the 30 to 40 range that was typical before the conflict. Those numbers includes five very large crude carriers that can collectively export about 10 million barrels of crude.
On the same day there were 15 inbound tanker transits and 5 VLCCs.
Meanwhile, what the Morgan Stanley team call the "twin solvers" are in place. Oil exports from the U.S. remain high, and net imports into China are still depressed.
"Combined, these two factors are still shielding the rest of the oil market of nearly 10 mb/d of tightness. That alone absorbed 70-80% of the decline in seaborne exports from the Middle East. However, with Middle East exports now ramping up again, it is solving a problem that is rapidly diminishing, causing a surplus in the Brent and Dubai markets," they say.
That's leading to the total number of unsold cargoes to be well above normal.
Before the war, the firm estimates there was a 2 million to 3 million barrel per day surplus for the years ahead. As the Strait reopens, the firm now estimates a 4.8 million bpd surplus for next year.
And while the Strait of Hormuz situation shows that flows next year will be uncertain, there are more bearish factors at play: the United Arab Emirates has left OPEC declaring an intent to raise production, Iran has secured major sanctions relief, Venezuela has surprised to the upside, U.S. supply has come in stronger than expected and demand has been scarred.
-Steve Goldstein
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June 30, 2026 05:23 ET (09:23 GMT)
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