Societe Generale’s commodities team has revised its Oil outlook, warning Brent could spike towards $150/bbl in a higher‑for‑longer scenario if the Strait of Hormuz is shut for two months. The bank raises its 2026 year‑end Brent forecast to $80/bbl from $65/bbl, citing large OPEC losses, tight inventories and only limited demand destruction.
Tight balances drive bullish outlook
"Our commodities team revised their oil forecasts and warn of the risk of $150/bbl in a higher-for-longer baseline scenario based on a two-month shutdown of Hormuz and lasting supply damage."
"We lift our 2026 year-end Brent forecast to $80/bbl from $65/bbl. We assume OPEC losses of 15 mb/d in March and losses and adjustments in April result in an eventual deficit of 8mb/d by mid/late month."
"We assume GCC output down by up to 3 mb/d through year-end. Iran loses 2 mb/d of export capacity for the rest of 2026. Additional OPEC supply returns gradually from May, alongside G7 SPR flows and resumed Chinese buying. Prices spike in April (~$125/bbl average with upside to $150/bbl) before easing to around $80/bbl by December."
"But demand rising towards ~106 mb/d keeps days-cover below five-year norms, reinforcing a structurally tight market. Some demand destruction is taking place, but nowhere near enough to close the gap, and inventories won’t get back to five-year norms until year-end."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Read more
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
