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Informist, Friday, Jul. 24, 2026

 

MUMBAI – ANZ Research said it has retained its Brent crude oil price forecast of $92 per barrel for the end of the third quarter (Oct-Dec), factoring in the uneven supply recovery from West Asia. However, if regional supply disruptions intensify and market buffers weaken, it could rise towards $120 per bbl.

 

The oil market has "avoided a more disorderly price response" due to several buffers – high inventories, China's lower imports, and Saudi Arabia's East-West pipeline flows bypassing the Strait of Hormuz – that absorbed part of the West Asia supply shock.

 

While China's sharp reduction in crude imports has acted as the largest "demand-side stabiliser," inventory releases limited the rise in prices, as they smoothed the supply-demand mismatch and bought time for alternative trade flows to emerge.

 

Governments and commercial operators entered the West Asia crisis with unusually high inventories. In February, global observed oil inventories stood at more than 8.2 billion barrels, the highest level since early 2021. OECD countries alone held around 1.25 billion barrels of government emergency stocks and another 600 million barrels of industry stocks held under government obligation. 

 

ANZ has estimated that emergency stock releases have provided around 2 million barrels per day of sustained supply. However, inventories are a bridge rather than a replacement for production. "The recent re-escalation in the Middle East conflict raises concerns about whether these buffers can effectively keep the world supplied with oil," ANZ said. 

 

Saudi Arabia's East-West Pipeline has emerged as an important oil route after the effective closure of the Strait of Hormuz. The pipeline is estimated to have a nameplate capacity of around 5 million barrels per day, which can be increased to about 7 million bpd under emergency operating conditions. 

 

Though the pipeline has been operating close to this emergency capacity during periods of heightened disruption, but capacity limits at Yanbu port have meant exports have averaged
just under 4 million bpd during the past two months. 

 

"A disruption to Red Sea shipping would impede the movement of both crude and refined products, potentially intensifying shortages in distillate markets and driving
refining margins higher," ANZ said.

 

At 1324 IST, the most active September contract of Brent crude oil on Intercontinental Exchange was down 2% at $98.78 per barrel.  End

 

US$1 = INR 96.48

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

 

Reported by Afra Abubacker

Edited by Avishek Dutta

 

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