Morgan Stanley Cuts Oil Forecasts on Fast Return of Hormuz Flows

Morgan Stanley has revised its crude oil price forecasts downward, citing an accelerated restoration of supply flows through the Strait of Hormuz. This adjustment operates through the supply disruption channel, as the normalization of transit routes reduces the geopolitical risk premium previously embedded in global energy valuations. Brent and WTI crude futures face the most immediate exposure, as the increased volume of available supply threatens to offset recent production cuts and tighten the market balance less aggressively than anticipated. Traders are now shifting focus toward the upcoming OPEC+ ministerial meeting, where member nations must decide whether to extend current output quotas to counteract the bearish implications of these restored maritime flows. This policy decision will serve as the primary catalyst for determining whether the current downward pressure on energy benchmarks persists or finds a floor near existing support levels.

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