Hormuz resumed navigation speed exceeds expectations, Morgan Stanley lowered oil price forecasts for the second time within two weeks.

Morgan Stanley has lowered its oil price forecast for the second time in two weeks, citing a faster-than-expected recovery in oil flow through the Strait of Hormuz, along with strong US supply and weak demand exacerbating the risk of oversupply. Analyst Martijn Rats at Morgan Stanley stated in the report that the price for Dated Brent crude oil futures is expected to average $75 per barrel in the third and fourth quarters, a decrease of $15 and $5 respectively. The analyst also lowered price expectations for the next four quarters and forecasted that by the end of 2027, the price for Dated Brent crude oil will fall to $70 per barrel. Morgan Stanley analysts stated, "The reopening of the strait has been faster than expected, with continued pressure from high US exports and subdued Chinese imports. As the focus shifts to 2027, the market has completed a full cycle, once again returning to an oversupplied state." Prior to this, Morgan Stanley had already issued a report lowering oil price forecasts in mid-June. Due to a temporary peace agreement reached between the US and Iran, paving the way for the reopening of the Strait of Hormuz, global benchmark Brent crude oil futures prices have plummeted by about 30% this quarter. This rapid change prompted analysts to reassess their forecasts, with Goldman Sachs also lowering their expectations. Goldman Sachs reduced their forecast for Brent crude oil in the fourth quarter of 2026 from $90 to $80 per barrel, and their average forecast for 2027 from $80 to $75 per barrel. Although shipping through the Strait of Hormuz was briefly disrupted over the weekend due to attacks on merchant vessels, there are indications that oil tanker companies are still willing to continue operations. This is a crucial step in restoring normalcy to the global market and releasing millions of barrels of oil supply from the region. Morgan Stanley reported that last Thursday, 35 oil and gas tankers passed through the Strait of Hormuz, the first time the number of tankers has returned to the normal level of 30 to 40 ships per day since the conflict erupted in February. The bank noted that to achieve oil market balance in 2027, oil flow through the Strait of Hormuz only needs to recover to about 65% of pre-conflict levels, or approximately 11 to 12 million barrels per day. Brent crude oil futures prices had soared to over $126 per barrel in April, but with Iran and the US continuing negotiations for a permanent end to the war, the futures have erased all gains from the war period. On Tuesday, the most actively traded September contract reported a price of $73.47 per barrel.