International banks are forecasting further declines in oil prices—from around $70 per barrel today—citing growing concerns over global oversupply. Citigroup analysts now project that Brent crude could fall as low as $60 per barrel by year-end, a level last seen in January. That would mark a sharp reversal from the $126 peak reached in late April, with Brent currently trading at $72 per barrel on July 3, 2026—erasing all gains accumulated since the outbreak of conflict in Iran.
Oil Flow Through Strait of Hormuz Rebounds
Shipping through the Strait of Hormuz has surged, with approximately eight tankers passing daily—up from just one or two per day over the past month—according to recent data. This rebound reflects renewed confidence among shipowners following the U.S.-Iran 60-day ceasefire and ongoing peace negotiations. As maritime traffic normalizes, pressure on oil prices is mounting.
Market Dynamics Shift
Citi analysts point to several contributing factors: cargo flows from shipping companies are stabilizing; Chinese buyers remain largely absent; heavy crude markets have weakened sharply; and inventory drawdowns have been far smaller than expected. Meanwhile, Russia—benefiting from eased sanctions—is expanding its customer base, boosting exports and revenues while reducing reliance on its two largest buyers: India and China.
Iranian Crude Adds to Supply Pressure
Iranian oil is also re-entering global markets at a 20% premium, as the U.S. embargo winds down and exports ramp up—further reinforcing oversupply risks.
Broader Consensus on Oversupply
Goldman Sachs Group has similarly warned that the global oil market is heading back toward oversupply, as the impact of the Iran conflict fades and Hormuz traffic recovers. Morgan Stanley has cut its oil price forecasts twice in recent weeks, citing the same risk.
But Geopolitical Risks Remain
Despite the downward pressure, the threat of escalation remains. A renewed blockade of the Strait of Hormuz could push Brent above $100 per barrel—though analysts expect such a spike to be short-lived.