Bank of America Raises Oil Price Forecast Amid Geopolitical Tensions
In a recent research note dated September 22, Bank of America raised its year-end Brent crude oil price forecast to $95 per barrel from $83. The adjustment reflects ongoing geopolitical tensions and disruptions in the Strait of Hormuz due to conflicts involving Iran. Francisco Blanch, head of global commodities strategy at BofA, warned that if these issues persist into early 2027, prices could exceed $150 a barrel. The bank noted that alternative shipping routes and escorted shipments have partially offset supply losses but are insufficient given damaged infrastructure and rising tensions. The current market is in backwardation, with near-term oil futures trading at a premium due to acute physical scarcity. BofA also highlighted thin global inventories as a key factor amplifying price volatility. Diesel prices are already at record levels, and the rise in crude could further pressure gasoline and diesel costs for consumers and industries reliant on these fuels.
Tickers: $BAC