Overview
- Citi raised its third-quarter Brent forecast to $80 on Friday, citing slow-moving U.S.-Iran negotiations that keep risk premia elevated.
- Brent traded around $81.79 late Friday while U.S. crude (WTI) was near $78.32, reflecting renewed price volatility after brief dips earlier in the week.
- The IEA calls the disruption the worst oil supply crisis on record and projects a near-term annual output decline of roughly 3.7 million barrels per day with a possible 7.5 million bpd rebound in 2027.
- Attacks and blockages have at times nearly halted traffic through the Strait of Hormuz, forcing tankers to reroute through passages such as Bab el-Mandeb and sharply raising war-risk insurance and freight costs.
- The tighter flows and higher transport costs are likely to push consumer fuel prices higher and weigh on global growth, prompting discussion of using depleted strategic reserves or coordinated naval protection to restore shipments.