Morgan Stanley Warns Hormuz Closure Could Push Brent to $150 by Summer
A Morgan Stanley research note warned that closure of the Strait of Hormuz could push Brent crude to $150 a barrel by summer. The bank described the current standoff as a 'race against time.'
Morgan Stanley's research note on Monday warned that Brent crude could climb to $150 a barrel if the Iran conflict worsens further. The bank called the current situation 'a race against time.' Brent traded near $105 in late trading.
Under the scenario, a temporary closure of the Strait of Hormuz is the central risk factor. Tankers crossing the strait carry roughly a fifth of the world's seaborne crude supply. Goldman Sachs and Citi have published similar projections, although Citi argued that $150 remains unlikely on supply and demand grounds.
The US Treasury said it stands ready to release additional barrels from the Strategic Petroleum Reserve if shortages emerge. European refiners have flagged US jet fuel as a possible backup supply route. India's Modi government urged households to economise on fuel and gold purchases. Wall Street strategists expect energy equities to see elevated volatility in the coming weeks.
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