Morgan Stanley has revised its oil price outlook downward for the second time in roughly two weeks, citing a faster-than-expected recovery in energy shipments through the Strait of Hormuz, alongside strong US production and weaker demand from China. The bank’s latest assessment, reported by Bloomberg, points to growing pressure in global markets and an increasing risk of oversupply.
Analysts at Morgan Stanley now expect Brent crude to average around USD75 per barrel in both the third and fourth quarters, representing reductions of USD15 and USD5 compared with previous forecasts. The bank also lowered its projections for all four quarters of next year, while estimating that Brent could decline further to about USD70 by the end of 2027.
In its commentary, the investment bank pointed to improving maritime flows and persistent supply-demand imbalances. “The Strait of Hormuz is reopening faster than expected, with the ‘twin drivers’ of high US exports and low Chinese imports remaining,” the analysts said, adding that the oil market is increasingly shifting back into surplus conditions as attention moves toward 2027.
The adjustment follows a broader decline in oil prices this quarter, with Brent crude futures falling by around 30% after a temporary truce between the United States and Iran allowed more tanker traffic to resume through the key shipping route. Although recent tensions have briefly disrupted shipping activity, overall flows have shown signs of normalization.
