Brent: Higher prices needed as Hormuz stays shut – OCBC

FXStreet Insights Team FXStreet

OCBC strategists Sim Moh Siong and Christopher Wong highlight that Brent briefly topped USD126 as the Strait of Hormuz closure and inventory drawdowns tightened supply, but optimism on a US–Iran deal has recently weighed on prices. They warn that if Hormuz remains shut for months, materially higher Oil prices will be needed to curb demand and see Brent near USD80 by year-end.

Hormuz closure underpins tighter oil outlook

"Hormuz disruptions linger, keeping physical oil markets tight despite an extended ceasefire and partial pipeline diversions."

"With the Strait of Hormuz still closed, prices would likely be even higher if not for ongoing drawdowns in strategic and commercial inventories."

"If the strait remains shut for months, markets will need to price materially higher oil to force demand destruction."

"Supply recovery, constrained by damaged infrastructure, will be uneven, even after reopening, supporting higher prices for longer into 2H26."

"We now expect Brent to end the year near USD80/bbl, up from USD70/bbl previously."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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