According to Morgan Stanley, crude oil prices are poised to face downward pressure as reopened supply corridors and robust U.S. export volumes converge to create a market oversupply in coming months. The investment bank has revised down its Brent crude forecasts for the next 18 months, now projecting Dated Brent to average $75 per barrel in the third quarter, reflecting expectations that Middle Eastern oil will return to markets in greater volumes following a reopening of the Strait of Hormuz.
Morgan Stanley analysts attribute their revised outlook to a confluence of factors, including the anticipated surge in Middle Eastern crude supply, sustained high levels of U.S. petroleum exports, and tepid crude purchases from China. The bank has now slashed its price projections for the second time in two weeks, signaling growing confidence in its bearish thesis for the global oil market during the forecast period.
The outlook underscores ongoing structural pressures facing energy markets as geopolitical constraints ease and supply-side dynamics shift. Investors and market participants will likely monitor developments in global crude flows and Chinese demand patterns closely as the forecast period unfolds.