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Oil could keep rising if Hormuz reopening talks fail, BoA warns
Bank of America said tanker traffic through the Strait of Hormuz is running at about 5 to 10 ships per day versus roughly 140 before the war, leaving diesel, gasoline, and natural gas markets short.
Bank of America warned that oil prices could continue climbing into winter if the United States and Iran fail to reach an agreement to reopen the Strait of Hormuz, according to OilPrice, citing comments to CNBC.
The bank expects an alternative path where negotiations remain unresolved and shipping levels do not return to normal. Francisco Blanch, head of commodities and derivatives research at Bank of America, said oil had been expected in a $70 to $80 per barrel range for Brent on the assumption of some resolution, but could “keep creeping higher into the winter” without it.
Blanch said tanker traffic through Hormuz is currently a fraction of pre-war levels, with only around 5 to 10 ships per day passing, compared with roughly 140 before the war. Oil rerouted through Saudi Arabia and the UAE would still require traffic to recover to around 80 to 100 ships per day to stabilize energy markets, the outlet reported.
While Blanch said there is enough crude oil for now, he pointed to true shortages in diesel, gasoline, and global natural gas. OilPrice added that refining margins are reflecting the stress, with diesel crack spreads rising to roughly $80 to $85 per barrel, and end-product shortfalls showing up in energy markets.
Latest closeWTI crude $78.07 ▲3.8%|Brent $83.46 |Nat gas $2.620 ▼2.5%