BofA Warns of $90 Oil as Hormuz Traffic Remains Critical

Bank of America (BoFA) is warning that oil prices could rise to $80-$90 per barrel if the U.S. and Iran fail to reach an agreement reopening the Strait of Hormuz.

The bank's head of commodities and derivatives research, Francisco Blanch, said that only around 5-10 ships per day are currently passing through the strait, compared to roughly 140 before the war.

This means that traffic would need to recover to around 80-100 ships per day just to stabilize energy markets. Blanch noted that 'we have enough crude oil for now, but we have true shortages in diesel markets, gasoline markets and also global gas.'

The shortages are particularly severe in refining margins, with diesel crack spreads surging to $80-$85 per barrel, higher than the price of WTI crude.