ING’s Warren Patterson raises ICE Brent forecasts as prolonged disruption through the Strait of Hormuz persists and peace talks between the US and Iran stall. The new base case assumes a gradual resumption of oil flows from May and June, with volumes staying below pre-war levels and Brent averages lifted for both 2Q26 and 4Q26.

Brent outlook lifted on supply risks

"In our base case, we initially assumed that we would start to see a gradual resumption of flows through the Strait of Hormuz in April. However, this has clearly not materialised. Therefore, we are updating our base case assumptions and, as a result, revising higher our ICE Brent forecasts."

"We are now assuming that oil flows through the Strait of Hormuz will slowly start resuming in May and June, and remain below pre-war levels for most of the year. This longer return allows for the gradual resumption of upstream production, which has had to shut-in due to storage constraints. It also allows for potential infrastructure damage, which could further slow the return to pre-war levels."

"Our new base case sees ICE Brent averaging $104/bbl ($96 previously) over 2Q26, while the significant inventory drawdown and slow recovery towards pre-war flows sees Brent averaging $92/bbl ($88/bbl previously) over 4Q26."

"Low inventories and the need to restock, whether commercial or strategic reserves, also suggests that oil prices will remain relatively well supported for the foreseeable future."

"The upside risks to this assumption are a near full closure of the Strait of Hormuz persisting through May, which would likely see Brent finding a floor above $100/bbl for the remainder of the year."

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