- Goldman Sachs cut its Q4 Brent forecast to $80/barrel from $90, citing the US-Iran deal; it expects Persian Gulf crude exports to fully normalize to pre-war levels by the end of July.
- Morgan Stanley cut its Dated Brent forecast to $90/barrel in Q3 (from $100) and $80 in Q4, warning that mine-clearing, insurer confidence, and vessel repositioning mean tanker flows will take “several weeks” to recover.
- Morgan Stanley projects a gradual production ramp: 50% of lost output restored by September, 80% by December, with the remainder returning in early 2027.
- Oil prices have already slumped to their lowest since early March following the deal announcement, though full MOU details have not yet been released ahead of Friday’s expected signing in Geneva.
What Happened?
Goldman Sachs and Morgan Stanley both moved to reprice the oil market Tuesday following the US-Iran interim peace deal. Goldman revised its Q4 Brent forecast down to $80 per barrel from $90, stating it now assumes Persian Gulf crude exports will normalize to pre-war levels by the end of July. Morgan Stanley took a more gradual view: cutting Q3 Dated Brent to $90 (from $100) and Q4 to $80, while cautioning that the physical recovery will lag the diplomatic headlines. Tanker flows face mine-clearing delays, cautious shipping insurers, and vessels repositioned away from the region that must return. Morgan Stanley estimates 50% of lost Persian Gulf production will be back online by September, 80% by December, and full recovery in early 2027.
Why It Matters?
The bank forecast revisions confirm markets are treating the Iran deal as structurally real. Brent is already at its lowest since early March, pricing in significant supply recovery before a single barrel has flowed through a reopened strait. The divergence between Goldman’s optimistic July timeline and Morgan Stanley’s multi-month ramp reflects genuine uncertainty: the MOU text hasn’t been released, mine-clearing requires multi-navy coordination, and commercial shipping confidence takes time to rebuild after months of blockade. If Goldman’s July normalization proves correct, the disinflationary impulse for energy-importing economies could arrive faster than expected — with meaningful implications for Fed rate policy heading into the second half of 2026.
What’s Next?
Friday’s Geneva signing is the next hard catalyst. If the MOU text confirms terms the market is pricing, further oil price pressure and a rally in energy-consuming sectors would follow. A delay or ambiguous language could trigger a snap-back. Other major banks are likely to update their energy outlooks this week. Longer term, Morgan Stanley flagged the pace at which empty tankers re-enter the Gulf as the critical logistics variable — that flow, more than any diplomatic statement, will determine how quickly lower oil prices feed through to global consumers and corporate cost structures.
Source: Bloomberg
