Major banks lower Brent oil forecasts as US-Iran talks raise hopes for Hormuz reopening

Morgan Stanley and Goldman Sachs reduced their outlook for Brent crude for the late 2026 period and for 2027 following recent developments in U.S.–Iran peace talks, according to a Bloomberg report. Morgan Stanley now projects an average of $80 per barrel for the last quarter of 2026 and $90 per barrel for the third quarter, down from a previous $100-per-barrel estimate for the third quarter. The bank left its fourth-quarter forecast unchanged.

"Much is still to be negotiated, and key risks remain, but for now, this is a key step towards a de-escalation of the conflict and higher oil exports via the Strait of Hormuz," the analysts wrote.

Goldman Sachs lowered its fourth-quarter Brent forecast to $80 per barrel from $90 and expects an average of $75 per barrel in 2027, down from $80. Its analysts said tanker traffic through the Strait of Hormuz should be fully restored by the end of July.

Citi also trimmed its projections, forecasting $75 per barrel for the third quarter of this year, $70 for the final quarter and $65 for 2027, down from an earlier $80 forecast for 2027.

The benchmark price fell to its lowest level since early March after news of a preliminary peace agreement between Washington and Tehran, which is expected to be signed in Switzerland and to prompt Iran to reopen the strait within 30 days. Brent traded around $82.5 per barrel, while U.S. WTI was near $80.2.