Morgan Stanley keeps Brent forecasts steady at 110 dollars

Morgan Stanley has maintained its price projections for Brent Crude Oil despite ongoing geopolitical tensions. The financial institution expects prices to hold at $110 per barrel through the second quarter of 2026, before easing to $100 in the third quarter and eventually settling at $80 by 2027.

The bank noted that global oil supply chains will likely require several months to stabilize, even if the strategic Strait of Hormuz is reopened to traffic. Under its current base-case scenario, exports through the waterway are expected to remain depressed throughout April, followed by a 70% recovery of lost volumes between May and July. A return to steady-state operations is not anticipated until October.

Market prices surged back above the $100 threshold on Monday as the United States Navy prepared to implement a blockade on shipping to and from Iran. This move follows a breakdown in negotiations between Washington and Tehran aimed at ending regional conflict, significantly threatening Iranian export capacity. At the start of the week, Brent crude futures were recorded at $102.23 per barrel, while West Texas Intermediate traded at $103.88.

In response to the tightening market, major producers in the Middle East have significantly increased their official selling prices for Asian markets. Both Kuwait and Iraq raised their May prices sharply. Meanwhile, Saudi Arabia set the price for its Arab Light crude at a record premium of $19.50 per barrel over the Oman/Dubai average.

Analysts now expect the disruption to global production to push the oil market into a supply deficit for the remainder of the year. This marks a significant shift from earlier projections that suggested a comfortable oversupply prior to the escalation of the conflict.