Why are major financial institutions lowering their oil price forecasts, and what specific price adjustments have they made for Brent crude?

Major financial institutions are lowering their oil price forecasts due to substantive progress in U.S.-Iran peace negotiations, which has reshaped market expectations of the Strait of Hormuz reopening and restored oil export flows. Morgan Stanley cut its Q3 2026 Brent crude average forecast from $100 to $90 per barrel (while keeping Q4 unchanged at $80), citing a key turning point toward de-escalation and Strait re-opening—though geopolitical risks remain unresolved. Goldman Sachs lowered its Q4 2026 Brent forecast from $90 to $80 per barrel and its 2027 average from $80 to $75, expecting full restoration of tanker traffic by late July to alleviate prior supply disruption concerns. Citibank issued the most bearish outlook, slashing its Q3 2026 Brent forecast to $75, Q4 to $70, and 2027 average to $65—down sharply from a prior $80 estimate—reflecting broad consensus that the retreat of Middle East geopolitical risk premium is triggering a fundamental repricing of oil supply-demand fundamentals.

What are the expected downstream economic impacts of falling oil prices following the U.S.-Iran diplomatic progress?

The falling oil prices—driven by U.S.-Iran preliminary peace agreement optimism—have pushed international oil to its lowest level since early March, with direct downstream benefits for the petrochemical industry: reduced raw material costs for firms using crude oil as a direct input, easing cost pressures on olefins, aromatics, and related derivatives; and fostering a near-term recovery in profit margins across the broader chemical supply chain.

Major Financial Institutions Slash Oil Price Forecasts Amid US-Iran Negotiations

Jun 22, 2026

Morgan Stanley, Goldman Sachs, and Citi lowered Brent crude forecasts due to US-Iran peace progress reducing geopolitical risk. Lower oil prices are expected to ease raw material costs for the downstream petrochemical industry.

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Major Financial Institutions Slash Oil Price Forecasts Amid US-Iran Negotiations

Major Financial Institutions Slash Oil Price Forecasts Amid US-Iran Negotiations

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