Bank of America Raises H2 2026 Brent Crude Forecast to $95 on Mideast Supply Risks

Bank of America analysts have significantly raised their price forecast for Brent crude for the second half of 2026, citing sustained geopolitical tensions that threaten major global oil supply routes. The bank now expects the global benchmark to average $95 per barrel during the period, a notable increase from its previous estimate of $83.

Chokepoints Under Pressure

In a research note published Monday, the bank's analysts pointed to Iran's effective blockade of the Strait of Hormuz as a primary driver for the revised forecast. The blockade, which began after a joint U.S.-Israeli strike in late February, has severely restricted a waterway that previously handled about one-fifth of the world's oil and liquefied natural gas (LNG) supply.

BofA estimates that the disruption at the Strait of Hormuz could be as high as 14 million barrels per day (bpd), compared to a pre-war average flow of 4-8 million bpd. The situation is compounded by a widening conflict in the region, with clashes between Iran-backed Houthi forces and Saudi-backed groups in Yemen threatening the Bab el-Mandeb strait—another critical chokepoint for oil tankers. These disruptions have also been exacerbated by an attack on a key east-west energy pipeline across Saudi Arabia.

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Market Volatility and Diplomatic Hopes

Oil markets have reacted to the volatile situation, with Brent crude futures falling back below $100 a barrel on Tuesday after trading above that level for several days on fears of a broader regional war. The recent price dip has been attributed to hopes for diplomatic progress during the United Nations General Assembly this week, with some media reports suggesting Iran has offered to reopen the Strait of Hormuz within seven days in exchange for a reduction in U.S. military pressure.

Despite some signs of resilience, such as a reported increase in Saudi crude shipments through Hormuz according to satellite data cited by Reuters, BofA analysts remain cautious. They noted that while alternative routes and escorted convoys have provided some relief, damaged infrastructure and persistent tensions could continue to constrain oil flows. The analysts warned that if these supply disruptions extend into next year, front-month Brent contracts could see a "further and sharp" increase in price.