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Informist, Tuesday, Apr. 28, 2026

MUMBAI – With peace talks between the US and Iran stalled, and no immediate sign of resumption of trade flows through the Strait of Hormuz, the global think tank ING Economics has revised upward its forecast for oil prices.

It is now assuming that oil flows through the Strait of Hormuz will slowly start resuming in May and June, and remain below pre-war levels for most of the year. Under this base case, it is forecasting the ICE Brent crude averaging $104 per barrel in second quarter of 2026. By the fourth quarter of 2026, it has forecast the price to average $92 per barrel, up from the previous forecast of $88 per barrel.

The war that started eight weeks ago has, among other consequences, led to the ongoing blockade of the Strait of Hormuz, a key chokepoint for the global oil market, where 20 million barrels of oil were passing before the war, it said in a release Tuesday.  

"After considering the diversion of some oil via pipelines and the trickle of tankers still making it through the Strait of Hormuz, around 14m b/d  (14 million barrels per day) of oil supply is currently disrupted. Over the first 2 months of the conflict, around 850m barrels (850 million barrels per day) of supply have been lost. Clearly, the disruption grows every day that passes without a resolution," it noted.

Earlier, the thin tank had assumed that a gradual resumption of flows through the Strait of Hormuz will happen in April. However, this has clearly not materialised. "Therefore, we are updating our base case assumptions and, as a result, revising higher our ICE Brent forecasts."

"Low inventories and the need to restock, whether commercial or strategic reserves, also suggests that oil prices will remain relatively well supported for the foreseeable future," it said.

However, the upside risk to this assumption is a near-full closure of the Strait of Hormuz persisting through May, in which case the price could be above $100 per barrel for the remainder of the year. Even more significant risk could emerge in case of a renewed war escalation. "Under this scenario, Saudi crude shipments via the Red Sea and UAE exports from Fujairah would also be disrupted, potentially driving oil prices to new record highs."  End

US$1 = INR 94.55

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Abhijit Doshi

Edited by Akul Nishant Akhoury

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