BofA cuts Brent forecast to $82 on Hormuz reopening

Bank of America Cuts Brent Forecast to $82 on Expected Strait of Hormuz Reopening

Bank of America said a full reopening of the Strait of Hormuz could pull the average 2026 Brent crude price down to $82 per barrel, a sharp reduction from its previous forecast of $93, according to a research note dated Wednesday.boereport

The bank expects Brent to trade in the $70 to $80 range for most of the second half of 2026, as the resumption of shipping through the critical waterway reshapes the global supply outlook.boereport

A Rapid Reversal After Months of War-Driven Prices

The revised forecast follows a U.S.-Iran interim agreement announced earlier this week to end the conflict that closed the strait to international shipping beginning in late February. The 14-point memorandum of understanding sets out a 60-day negotiation period during which Iran would allow vessels to pass through without fees, with full traffic capacity expected to be restored within 30 days.aljazeera

Bank of America’s outlook has shifted dramatically over the course of the conflict. In March, the bank raised its 2026 Brent forecast to $77.50 from $61 as disruptions tightened supply. By April, with no end to fighting in sight, it projected Brent would average $92.50 and trade around $100 for the rest of the year. The latest revision marks the first downward adjustment since hostilities began.reuters

Market Reacts but Logistics Lag Behind

Oil prices fell to their lowest levels since the first trading day of the war on Thursday, as traders priced in improved supply prospects. Earlier in the week, Brent futures had already dropped below $80 per barrel following news of the preliminary U.S.-Iran deal.aljazeera

However, analysts caution that physical supply will take time to recover. CNBC reported that shipping specialists expect several weeks to clear the backlog of vessels stranded on either side of the strait, with Kpler estimating 118 tankers currently stuck in the Persian Gulf. HSBC’s global head of transport and logistics said shipping companies remain in “wait-and-see” mode as de-mining operations continue.cnbc

Broader Outlook

Despite the forecast cut, Bank of America still projects a net oil deficit of 2.6 million barrels per day in 2026, compared with pre-war expectations of a 2 million barrel-per-day surplus. It expects prices to decline further to an average of $70 per barrel in 2027 as the surplus returns.boereport

Goldman Sachs, Morgan Stanley, and Citi also lowered their oil price forecasts earlier this week.boereport