Oil’s Best-Case Is $90. The Worst-Case Could Be a Lot Worse.

The Strait of Hormuz crisis remains unresolved, leaving oil supply risks elevated throughout the market. Many Wall Street strategists now believe Brent crude will stabilize near $90 for the remainder of the year.

source：Trading Eco

Francisco Blanch, head of commodities research at Bank of America, highlighted the critical supply deficit in a Bloomberg TV interview. “We have a fairly sizable deficit. To get to a level where we can stabilize prices and go down to $60 or $70, we're missing 14 to 15 million barrels a day.”

As of Friday, Brent crude has surged nearly 80% year-to-date, trading at $109.26. The key shipping lane carrying one-fifth of global oil remains disrupted, pressuring energy consumers and industrial users worldwide.

The NACHO trade continues gaining traction. Goldman Sachs raised its year-end Brent target to $90, with WTI at $83. The bank expects Hormuz exports to normalize by late June, while Middle Eastern crude output has dropped by 14.5 million barrels daily, triggering record inventory drawdowns. Bank of America shares a cautious stance, naming $90 the best-case scenario.

Major oil trader Gunvor issued a harsher warning. “We're digging into stocks and we're coming to an end,” said Frederic Lasserre, global head of research. He stressed June as a critical tipping point, warning that prolonged tightness could force fuel rationing and trigger an economic recession. JPMorgan also cautioned that one more month of bottlenecks may cause a catastrophic crude shortage.

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Helima Croft from RBC Capital Markets dismissed market optimism as “magical thinking”. She doubts a June traffic recovery, stating military intervention and diplomatic breakthroughs are both unlikely. Iran retains strategic control over the strait, making any quick supply restoration extremely difficult.

Blanch outlined three oil scenarios. A quick blockade resolution is the mildest outcome. A prolonged dual blockade could push crude to $120–$130 by early July. Renewed warfare represents the worst case, risking long-term infrastructure damage and extreme price volatility.

Higher fuel prices have already burdened U.S. households. Brown University data shows Americans have paid an extra$40 billion in fuel costs since the Iran conflict began, averaging $316 per household. Public dissatisfaction is rising, weighing on current political approval ratings.

While some traders still expect pre-midterm election de-escalation, market sentiment is shifting. If the June reopening narrative collapses, investors will reprice oil for prolonged conflict. For traders, the key question is no longer how high oil can go — but when the $90 consensus breaks.