Oil Price Outlook Raised As Strait Of Hormuz Disruption Strains Global Supply

Global oil markets are facing mounting pressure as supply disruptions linked to tensions in the Persian Gulf continue to impact availability, prompting major financial institutions to revise their price forecasts upward.

Analysts at Goldman Sachs now expect Brent crude prices to average around $90 per barrel in the final quarter of the year, while West Texas Intermediate is projected at about $83 per barrel.

The revision comes as the prolonged closure of the Strait of Hormuz restricts a key global oil supply route.

The brokerage highlighted a sharp drawdown in inventories, estimating that supply losses from the Persian Gulf have reached over 14 million barrels per day. This has led to a rapid decline in global stockpiles, signalling a significant imbalance between supply and demand.

The disruption, largely tied to the ongoing standoff between the United States and Iran, has shifted the oil market from surplus conditions last year to a sizeable deficit in the current quarter.

As a result, crude prices have surged, with Brent gaining substantially since tensions escalated earlier this year.

JPMorgan also noted that the market is undergoing a swift adjustment. Supply constraints are forcing reliance on existing inventories and reduced consumption.

The bank warned that limited spare production capacity could lead to further price increases if disruptions continue.

Similarly, Morgan Stanley reported a steep decline in exports from the Gulf region, reinforcing concerns about tightening supply conditions worldwide.

Despite some signs of easing geopolitical tensions, analysts caution that risks to oil prices remain tilted upwards. They added that weaker global demand alone may not be sufficient to offset the current supply shortfall.

In recent trading, Brent crude moved above $108 per barrel. WTI also recorded gains, reflecting continued volatility in energy markets.

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