OCBC strategists Sim Moh Siong and Christopher Wong argue that market hopes for de-escalation in the US–Iran conflict look premature for Brent. While Brent has retreated from highs near USD119, they see the Strait of Hormuz situation as controlled disruption rather than resolution, with Iran–Oman traffic protocols and Trump’s threats suggesting ongoing supply risk despite their base case for Brent easing to USD85–70 over 6–12 months.

Hormuz tensions sustain Oil risk

"The US-Iran conflict has entered its sixth week with no clear path to de-escalation."

"Over the past week, sentiment improved on de-escalation hope. Brent retreated from early-week highs near USD119/bbl, hawkish central bank rate expectations were pared back, and the USD traded mixed versus G10 peers."

"Reports of Iran drafting with Oman a protocol to manage Strait of Hormuz traffic reduce the risk of a full shutdown—but point to managed restrictions rather than a clean reopening."

"President Trump ramped up his threats to destroy Iran’s power plants and bridges unless it reopens Strait of Hormuz by his Tuesday deadline."

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