Goldman Sachs and Morgan Stanley Cut Brent Forecasts as Hormuz Supply Recovery Accelerates

Brent crude declined 25.57% in 30 days, trading at $74.02 per barrel as of 8:45 a.m. ET on June 25, 2026, per Fortune, compared with $99.46 per barrel a month earlier. The selloff erases virtually all of the wartime risk premium that drove Brent above $100 per barrel in March 2026 as the 2026 Strait of Hormuz crisis curtailed Gulf shipping. Goldman Sachs and Morgan Stanley both revised their price forecasts lower on Thursday, citing evidence that Persian Gulf oil supply is recovering ahead of schedule.

Goldman Sachs cut its Q4 2026 Brent forecast to $80 per barrel from $90, and simultaneously reduced its Q4 2026 WTI estimate to $75 per barrel. The bank also lowered its 2027 average Brent outlook to $75 per barrel from $80. Goldman's commodity analysts expect tanker traffic through the Strait of Hormuz to return to normal by late July 2026, a month earlier than the bank's previous assumption. The revised timeline follows a June 17 US-Iran memorandum of understanding that included a framework to lift the US naval blockade and reopen commercial shipping.

Goldman and Morgan Stanley Agree on Q4, Diverge on Q3

Morgan Stanley also targets $80 per barrel for Brent in Q4 2026, placing it in line with Goldman on the end-of-year forecast. The bank's Q3 2026 view differs; Morgan Stanley projects Brent at $90 per barrel through September, compared with Goldman's lower Q3 assumption. Morgan Stanley analysts attributed the more gradual recovery to logistical constraints, including time needed to restore tanker routing patterns and restart idle wellheads. Analysts cited expectations that supply chains would take months to normalize even with the Strait reopening. The Q3 gap reflects genuine uncertainty about how fast the Hormuz effect fully reverses.

Both banks reduced their forecasts from elevated wartime levels. Earlier in the crisis, Morgan Stanley had maintained a Q2 2026 target of $110 per barrel and a Q3 target of $100 per barrel, with the Hormuz disruption underpinning the upward adjustments. Goldman had also lifted forecasts on weaker Middle Eastern output before reversing course. The sequence, lift on disruption and cut on resolution, captures the round-trip that oil prices have undergone since late February 2026.

The Scale of the Risk-Premium Unwind

Oil Authority calculates that the 30-day price decline from $99.46 to $74.02 per barrel represents a $25.44 per barrel drop. The Strait of Hormuz carried 20 million barrels of oil per day in its final pre-crisis period, per Wikipedia's 2026 crisis article citing 2024 throughput data. Applying the $25.44 per barrel decline to that throughput indicates that Persian Gulf exporters are collectively receiving $509 million less per day in oil revenue compared with conditions a month ago. The unwinding is structural: as tankers resume transit, the supply shortfall that justified the risk premium shrinks week by week.

Brent reached a peak of $126 per barrel during the 2026 Strait of Hormuz crisis, per Wikipedia's article on the 2026 crisis. From that peak to Thursday's $74.02 per barrel, the decline is $51.98 per barrel, a 41% drawdown. Shipping data showed a 95% reduction in crude oil tankers and a 99% reduction in LNG vessels transiting the strait at the crisis peak, per Wikipedia. As those restrictions ease, the structural supply overhang that sustained the premium disappears.

What the Forecasts Leave Open

The Goldman and Morgan Stanley forecasts assume a relatively smooth reopening of the Strait of Hormuz. Complications remain, including Iraq's warning on Thursday to leave OPEC if its production quota is not raised, which could disrupt the expected supply ramp from the second-largest OPEC producer. EIA's June 2026 Short-Term Energy Outlook projects global oil inventories to fall by an average of 6.3 million barrels per day in Q2 2026. OECD inventories are on track for their lowest level since 2003, providing a cushion against a sharp additional price drop if the Hormuz reopening is delayed. Both Goldman and Morgan Stanley treat the June 17 agreement as the base case but acknowledge geopolitical complications could alter the trajectory.