Bank of America: $90 Oil Price Is Already the 'Best-Case Scenario'; Could Reach $130 in Early July If Double Lockdown Continues

On May 19th, Francisco Blanch, Head of Commodity and Derivatives Research at a U.S. bank, noted that hitting an average Brent crude price of $90 per barrel for the rest of the year would be the "best-case scenario." He highlighted that global crude oil markets still face a daily supply gap of 14% to 15%—equal to 14 to 15 million barrels. If the Strait of Hormuz’s "double blockade" holds, Brent prices could climb to $120 to $130 per barrel by late June or early July. Should the conflict worsen and disrupt oil infrastructure entirely, prices could jump even more sharply, Blanch warned. Given the Strait of Hormuz crisis shows no signs of easing anytime soon, multiple Wall Street firms have revised up their oil price forecasts. Goldman Sachs already bumped its full-year Brent target to roughly $90, while JPMorgan chimed in with a darker note: if this critical maritime chokepoint stays shut for four weeks, the globe could face a "catastrophic" oil shortfall. Royal Bank of Canada analyst Helima Croft also cast doubt on whether normal shipping will resume in June. So far this year, Brent crude has jumped a whopping 80%, trading at $109.26 per barrel as of press time. The Strait of Hormuz carries roughly one-fifth of the world’s seaborne oil trade, and the blockade is hitting the Asia-Pacific region especially hard while pushing up costs for consumers and industries worldwide. Data from Brown University reveals that since the Iran war began, U.S. consumers have shelled out over $40 billion in extra fuel costs.