ING analysts Warren Patterson and Ewa Manthey say the Brent market remains highly sensitive to Iran-related news, with prices dropping sharply on renewed hopes of a US-Iran agreement and improved tanker flows through the Strait of Hormuz. Their base case projects Brent averaging $104/bbl this quarter before easing into the $90s later in the year, contingent on recovering Persian Gulf exports.

Brent outlook hinges on Hormuz flows

"The oil market remains overly sensitive to Iran-related headlines, with participants continuing to pin considerable hope on reports that talks between the US and Iran are progressing."

"The latest report suggests that the US is in the “final stages” with Iran, raising hopes for an end to the war and reopening of the Strait of Hormuz."

"Our base case sees Brent averaging $104/bbl this quarter."

"Then, we see oil trading into the $90s in the second half of the year, assuming that Strait of Hormuz oil flows amount to around 4m b/d by the end of May."

"We will need to see this trend of tankers passing through the Strait of Hormuz continue for our base case to hold."

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