. . . In its low case scenario, BMI anticipates a “short-lived, large campaign, but with greater regional spillover, [and] partial/full Hormuz disruption”, the report showed. This scenario sees a settled oil price trading range of between $75 and $90 per barrel.
BMI’s mid case scenario also anticipates a “short-lived, large campaign, but with greater regional spillover, [and] partial/full Hormuz disruption”, but this scenario projects a settled oil price trading range of between $90 and $110 per barrel, the report outlined. In this scenario, “direct tanker strikes, vessel seizures, swarm tactics or limited mine-laying force temporary pauses while lanes are assessed” and infrastructure outages “become more consequential”.
Under BMI’s high case scenario, there is a “prolonged, large-scale campaign, greater regional spillover, [and] partial/full Hormuz disruption”. This case sees a settled trading range between $110 and $130 per barrel and warns of a risk of prices jumping over $130 per barrel. In this scenario, commercial transit of the Strait “becomes commercially non-viable even if not formally ‘closed’” and infrastructure sees “extensive and systemically significant outages”.
In a separate BMI report sent to Rigzone by the Fitch Group on Tuesday, BMI analysts said they are maintaining their 2026 Brent crude forecast at $67 per barrel, “despite a stronger than expected price performance in Q1 and the outbreak of military hostilities between the U.S., Israel, and Iran”.
“While the distribution of outcomes has widened materially and near-term upside risks have intensified, our analysts’ core view for a short-lived, albeit large, campaign is consistent with a brief spike in oil prices in March, followed by rapid retracement heading into Q2, as geopolitical risk premia fade and investor focus shifts back towards loose underlying fundamentals,” BMI analysts stated in that report.
“This will limit the impact on prices from an annual average perspective,” they added.
The analysts noted in that report that they are factoring in a trading range of around $75 to $90 per barrel in March, “bringing the Q1 average to around $71 per barrel”.
“In Q2, we forecast a far lower average, at $63 per barrel,” they said.
“This view makes several key assumptions, most notably a rapid normalization of transit through the Strait of Hormuz and no material lasting damage to Middle East Gulf export infrastructure,” they noted.
“Stripping away conflict-related disruptions, the global oil market looks oversupplied for H1 and the loss of the geopolitical risk premia surrounding Iran would likely be the trigger for a sharp sell-off in Brent,” they continued.
“Over H2, we expect a gradual recovery in prices, and a marked reduction in volatility, as oil demand continues to rise and economic momentum and market sentiment improve,” they stated.
“That said, whereas the risks to our $67 per barrel average forecast were previously skewed to the downside, they now skew to the upside, given the potential for wider escalation and larger and longer-lasting conflict-related disruptions,” the analysts went on to state. . . .
