The American bank Morgan Stanley warns that “the oil market is in a race against time”, and if the Strait of Hormuz remains blocked even in June, the barrel of oil will probably reach 150 dollars, in the following months.
An analysis conducted by the American bank Morgan Stanley reveals that, should the Strait of Hormuz remain closed to transit even in June, oil prices could rise to 130 – 150 dollars/barrel by the end of the year.
Analysts say that, although the conflict between Iran and the USA has already led to the loss of nearly a billion barrels of oil from the market, quotations have not exceeded the highs reached after Russia’s invasion of Ukraine in 2022. The reason is that the market entered the crisis with certain available reserves, and investors have consistently bet on the rapid reopening of the Strait of Hormuz.
In addition, the impact was also limited by two significant developments: US oil exports have surged, and China has reduced its imports. According to Morgan Stanley, these two elements have offset a deficit of approximately 9.3 million barrels per day. However, the bank explains that, in the event of a prolonged blockage, the US and China can no longer keep prices under control, and the market will become tense again.
The main scenario expected by Morgan Stanley is for the Strait of Hormuz to reopen before the USA or China would need to significantly adjust their trade flows. Thus, prices would be expected to rise to 110 dollars/barrel in the current quarter, then gradually decrease to 100 dollars and then to 90 dollars, by the end of the year. However, if the blockade persists, the market balance could be severely affected.
“A prolonged closure until the end of June or even July is the scenario in which the Brent price should compensate for the imbalance it has so far avoided”, the analysts point out.
Details, HERE