BOA Sees Oil Price Spike to $150 Amid Supply Disruptions

Bank of America has raised its forecast for Brent crude oil prices to $95 per barrel by the end of 2026. The bank's strategists, led by Francisco Blanch, warn that prices could exceed $150 in a scenario of prolonged supply disruptions.

The current supply shortages and geopolitical tensions are contributing to the potential price spike. The Strait of Hormuz, which handles about one-third of global crude oil trade, has seen its traffic severely restricted, with estimates suggesting an average reduction of 4-8 million barrels per day.

Although alternative routes and escort shipments have mitigated some of the supply shortage, damage to infrastructure and rising tensions hinder a rapid normalization. The bank's central forecast is for Brent contracts to average around $80 per barrel in 2027, but they warn that prices could surge above $150 if disruptions persist into spring 2027 or worsen.