Macquarie latest bank to slash oil forecasts on Hormuz deal

Macquarie on Monday cut its 2026 Brent forecast to $80 and 2027 to $75, joining Goldman Sachs ↘1.30%, Morgan Stanley ↘2.11%, and Citi ↘0.92% in repricing oil lower.bloomberg
The revisions follow a June 14 U.S.-Iran framework deal to reopen the Strait of Hormuz within 30 days, with Goldman now expecting Gulf exports to normalize by late July.nbcnews
Brent and WTI benchmarks have fallen more than 10% since the deal was announced, as markets shift from war-premium pricing to an oversupply outlook.wsj

Wall Street Slashes Oil Forecasts as Strait of Hormuz Reopens

Major Wall Street banks have sharply cut their oil price forecasts in the wake of the U.S.-Iran peace framework and the reopening of the Strait of Hormuz, unwinding months of war-premium pricing that had kept crude elevated above $100 per barrel earlier this year.

Goldman Sachs lowered its fourth-quarter 2026 Brent crude forecast to $80 per barrel from $90, and its 2027 average to $75 from $80, citing a one-month acceleration in the expected normalization of Persian Gulf exports. Morgan Stanley cut its Q4 Dated Brent estimate to $90 from $100 and sees $80 next year. Citi slashed its Q3 and Q4 2026 Brent projections to $75 and $70, respectively, and dropped its 2027 forecast to $65 from $80. On Monday, Macquarie joined the wave, cutting its 2026 Brent outlook to $80 and its 2027 forecast to $75.cnbc

The Deal That Changed the Calculus

The catalyst was the June 14 announcement by President Donald Trump and Iranian representatives of a memorandum of understanding to end hostilities and reopen the strait. The 14-point agreement, formally released on June 17, commits the U.S. to lifting its naval blockade within 30 days while Iran ensures safe commercial passage through the Persian Gulf. A signing ceremony took place on June 19 in Switzerland, initiating a 60-day window for final negotiations.nbcnews

Follow-up talks in Switzerland concluded on Monday with mediators from Pakistan and Qatar announcing a “roadmap towards finalizing an agreement within 60 days,” including a new communication channel to “prevent incidents and miscommunication” in the strait.aljazeera

Market Response

Oil prices have fallen sharply since the deal was announced. WTI crude futures closed at $73.21 on June 23, while Brent traded near $77.94 at the open that day — both benchmarks down more than 10% from levels the prior week. On Tuesday, crude continued drifting lower as traders bet on accelerating supply recovery.youtube

Goldman Sachs now expects Persian Gulf exports to return to pre-conflict levels by end of July, a month earlier than previously assumed. Morgan Stanley estimates 50% of lost output could be restored by September and 80% by December. Despite forecasting a surplus of 3.2 million barrels per day in 2027, Goldman expects prices to hold near long-term fair values due to low inventories and strategic stockpiling exceeding one million barrels per day.investing

The rapid repricing marks a dramatic reversal from April, when Citi warned Brent could spike to $150 if Hormuz disruptions persisted through June. Instead, the market has flipped from a war-premium shortage to an oversupply outlook in a matter of weeks.energynow