Source: OilPrice.com / Bloomberg — May 11, 2026
Author: Tsvetana Paraskova, citing Morgan Stanley commodity strategists
Price Forecasts (Unchanged)
| Period | Dated Brent ($/bbl) |
|---|---|
| Q2 2026 | $110 |
| Q3 2026 | $100 |
| Q4 2026 | $90 |
Worst case: $150/bbl if Hormuz closure extends into late June or July.
Core Argument: Buffer Exhaustion
Morgan Stanley identifies two key buffers that have so far prevented a full-blown price spike:
- US export surge — Soaring US crude exports have partly offset Gulf supply losses
- China import reductions — Reduced Chinese crude imports have lowered demand-side pressure
These buffers have been effective at keeping futures prices below what the physical supply disruption would normally imply. However, these buffers are finite and will be exhausted if Hormuz remains closed beyond June.
The "Race Against Time" Framework
"The path matters: a reopening in June with US and Chinese buffers still partly intact is the base case; a closure that runs into late June or even July is the regime in which Brent flat price has to do work it has so far been able to avoid."
This is a regime-change warning. If the Strait reopens in June, the market avoids the worst. If it doesn't, the physical price shock finally manifests in futures markets.
Context
- Goldman Sachs warned that global oil inventories are crashing and approaching an eight-year low
- Rate of depletion is so fast it exposes the market to further shocks
- Trump rejected Iran's response to a U.S.-drafted peace proposal (as of May 11)
Significance
The $150 worst-case scenario from Morgan Stanley is the highest credible forecast from a major bank. The "race against time" framing makes the June timeline the single most important variable in oil markets. This is essentially a bet: the market has been "getting away with it" because of buffer stocks and trade rerouting, but that window is closing.