Oil Market Consensus Settles Near $100 as Hormuz Closure Drains a Billion Barrels of Supply

Oil Market Consensus Settles Near $100 as Hormuz Closure Drains a Billion Barrels of Supply A Bloomberg Intelligence survey shows most market participants expect ICE Brent crude to average $81-100 over the next year as demand destruction caps the upside. ICE Brent crude front-month traded at $105.83 a barrel on Thursday, up 0.77% on the session, while NYMEX WTI front-month rose to $99.23. The gains came after data showed the US drew nearly 10 million barrels from its Strategic Petroleum Reserve in a single week, the largest weekly withdrawal ever recorded, according to the EIA.⁴ A Bloomberg Intelligence survey of market participants found a majority now expect Brent to average $81 to $100 a barrel over the next 12 months. The consensus has settled on a view that demand destruction will cap prices near $100 even as millions of barrels of supply remain offline from the Iran conflict. Bloomberg described this as the market pricing crude to be constrained rather than unleashed.³ The supply loss is staggering. Morgan Stanley warned the oil market is in "a race against time," with strains intensifying if the Strait of Hormuz stays closed into June. Despite the loss of almost 1 billion barrels since the disruption began, futures have failed to top levels seen in 2022. Analysts including Martijn Rats attributed the restraint to buffers that existed when the crisis started and persistent investor expectations that the strait would reopen.⁷ Those buffers are eroding fast. UBS projects global stockpiles could fall near a record low of 7.6 billion barrels by the end of May. The United States has increased exports by 3.8 million barrels per day, while China has cut imports by 5.5 million barrels per day, shielding the rest of the world from what Morgan Stanley calculated as 9.3 million barrels per day of tightening pressure.^6,7 ICE Brent crude briefly topped $111 a barrel earlier in the week after President Trump posted on Truth Social that Iran's "clock is ticking." The remark fuelled fresh fears of renewed military escalation. The IEA flagged record inventory depletion.⁶ The strait has been inaccessible for more than eight weeks. OilPrice.com reported Brent rising 2.61% in Asian trade as US-Iran talks showed no sign of resumption. Iran cautioned against further attacks and announced measures to strengthen its control over the waterway, which previously handled oil and LNG exports accounting for roughly 20% of global supply.^8,4 Not everyone sees prices staying elevated. HSBC is sticking with the bear case on balances, arguing that OPEC+ will pick up the pace of quota increases in the second and third quarters of 2026 as the group leans back into market share. The bank noted OPEC+ had signed off on a 137,000 bpd hike for December and paused further increases through January to March.⁵ Ceasefire uncertainty keeps swinging prices. Montel reported oil rising 3% earlier in the month as continued strikes by both Iran and Israel raised doubts over a fragile two-week ceasefire. A subsequent exchange of fire between US and Iranian forces in the Strait of Hormuz put further pressure on the truce.^10,9 The downstream pain is already measurable. Italian business lobby Confindustria warned that Italian industry could face extra energy costs totalling EUR 21 billion this year if the war persists to year-end. European gas prices could almost triple under the same scenario, Confindustria said. Even if the conflict ended by April, gas prices would still run 14% higher on average than last year.^2,1 The market's base case of Brent near $100 contains two assumptions that both need to hold. First, demand destruction in Asia and elsewhere continues to absorb the supply shock without a price spike above $115. Second, the Strait of Hormuz eventually reopens on a timeline measured in weeks, not quarters. Morgan Stanley's "race against time" framing captures the risk if the second assumption fails. Watch the May-end global inventory data from UBS and whether the record SPR drawdown pace is sustained. If stockpiles breach the 7.6 billion barrel floor and Hormuz remains closed through June, the $81-100 consensus will need to reprice higher.