BofA Lifts Brent Oil Target to $95 Amid Hormuz Strait Disruptions

Bank of America analysts have raised their price forecast for Brent crude for the second half of 2026, citing persistent geopolitical tensions that have severely disrupted key global energy supply routes. The bank now projects the global oil benchmark will average $95 a barrel in the last six months of the year, a significant increase from its previous estimate of $83 a barrel.

Supply Risks Drive Forecast Upgrade

In a research note dated Monday, BofA pointed to the ongoing conflict in the Middle East as the primary driver for the revised outlook. The analysts highlighted Iran's effective closure of the Strait of Hormuz, a critical chokepoint through which about one-fifth of the world's oil and liquefied natural gas flowed before the conflict began.

According to the bank's estimates, disruptions to oil shipments through the strait have reached highs of approximately 14 million barrels per day, a sharp increase from the pre-war average of 4 million to 8 million barrels per day. These disruptions followed a joint U.S.-Israeli military assault on Iran in late February.

Widening Regional Conflict

The security situation has been complicated by a broadening of the conflict. Clashes have erupted in Yemen between Iran-backed Houthi militants and Saudi-aligned forces near the Bab el-Mandeb Strait, another vital chokepoint for oil flows. Major producer Saudi Arabia has become more reliant on this route since the Hormuz closure, and has also faced separate attacks on a key east-west pipeline.

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Despite these pressures, there have been some signs of resilience. Citing satellite data, Reuters reported that Saudi Arabia has recently managed to increase crude shipments through Hormuz. Furthermore, diplomatic efforts at the United Nations this week have raised hopes for de-escalation, with one media report suggesting Iran offered to reopen the strait in exchange for reduced U.S. military pressure.

Market Impact and Outlook

The heightened tensions recently pushed Brent crude futures above the $100 per barrel mark for several days. Prices have since retreated below that level, sinking on Tuesday amid the tentative signs of diplomatic progress.

However, BofA analysts cautioned that while alternative routes and escorted shipments have mitigated some supply constraints, widespread infrastructure damage and elevated tensions are likely to keep flows limited. The bank warned that if the disruptions continue into next year, front-month Brent contracts could experience further price spikes.