Commerzbank (note from Friday) raised its Brent forecast to $90/bbl by end-September and $85 by year-end, up from $80 for both, citing Hormuz closure, inventory draws and a slow Gulf output recovery.
Summary:
- Brent forecast raised to $90/bbl by end-September and $85 by year-end, up from a prior $80 for both periods, on the assumption the Strait of Hormuz remains closed for another two months until early August
- Even an immediate US-Iran agreement would require several weeks of mine-clearing before safe navigation resumes; Iran has reportedly been given 30 days for demining
- Gulf oil production expected to remain below pre-war levels for some time due to ramp-up delays and infrastructure damage, with no return to pre-war prices forecast in the near term
- European gas prices seen staying around 50 EUR/MWh through year-end even after Hormuz reopens, with Commerzbank’s base case pointing to storage of only around 70% by end-September against an 80% target
- Qatari LNG facility capacity could be reduced by around 20% for the next three to five years; higher Asian LNG demand from El Nino conditions poses additional upside risk to European gas
Commerzbank has raised its Brent crude price forecasts for the coming quarters, lifting its end-September projection to $90 a barrel and its year-end figure to $85, in both cases up from a prior estimate of $80. The German bank cited the prolonged closure of the Strait of Hormuz, accelerating inventory draws, and a recovery in Gulf oil production that is expected to remain well below pre-war levels for an extended period.
The revised outlook is built on the assumption that the strait stays closed to normal shipping until early August. Critically, analysts at the bank noted that even an immediate diplomatic breakthrough would not translate quickly into resumed supply flows. Mine-clearing operations alone are expected to take several weeks, and Iran has reportedly been allocated 30 days for demining work. The implication is that the market faces a structural supply gap regardless of how soon a political agreement is reached.
The inventory dimension adds a further layer of support to prices. Stockpiles have been drawing throughout the closure, and the restocking demand that follows a reopening is expected to absorb a significant portion of the returning Gulf supply, capping any price decline. Infrastructure damage and production ramp-up delays mean output from the region is unlikely to snap back cleanly, keeping the supply recovery gradual rather than immediate.
On natural gas, the picture is similarly constrained. European prices rose to 49 EUR per MWh last week following reports of fresh US strikes on an Iranian military base, and Commerzbank sees them staying around 50 EUR/MWh through year-end even after Hormuz reopens. The concern extends beyond current flows: analysts estimated that Qatari LNG facility capacity could be curtailed by around 20% for the next three to five years due to conflict-related damage. Europe is currently in its critical storage replenishment window, and the bank’s base case puts storage at only around 70% by end-September, well short of the 80% target.
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The revision adds a structurally bullish data point to a market already trading on elevated risk premia. Commerzbank’s assumption that the strait remains closed until early August, combined with a multi-week mine-clearing lag even under a best-case diplomatic scenario, effectively rules out any near-term supply normalisation. The inventory depletion argument is particularly significant: the restocking demand that follows a reopening may absorb returning Gulf supply rather than allowing prices to fall. On gas, the 70% European storage scenario under Commerzbank’s base case poses a meaningful winter supply risk, with the 50 EUR/MWh floor forecast through year-end keeping pressure on industrial energy costs across the continent
