Not long ago, analysts were floating the possibility of oil hitting $150 per barrel if the Strait of Hormuz stayed closed. Now Morgan Stanley is cutting its price targets by double digits, and the story has changed considerably.
The bank lowered its Dated Brent forecast for Q3 2026 from $100 per barrel to $90, and slashed the Q4 2026 outlook from roughly $95 down to $80. That is a $15-per-barrel haircut on the back half of the year, driven by a faster-than-expected reopening of one of the world’s most critical oil shipping corridors.
What changed, and why it matters now
The catalyst is a US-Iran agreement announced around June 15-16, 2026, which is expected to restore crude flows through the Strait of Hormuz. The strait is the narrow chokepoint connecting Persian Gulf producers to global markets.
Morgan Stanley’s analysts now anticipate roughly 50% of disrupted output returning by September 2026, with about 80% back online by December. Full production recovery is not expected until early 2027.
