Major international banks have revised their oil price forecasts lower after recent diplomatic progress between the United States and Iran eased concerns over prolonged disruptions to global crude supplies and shipping routes.
The latest outlook revisions from Morgan Stanley, Goldman Sachs and Citi come as Brent crude prices have retreated sharply from recent highs, with traders increasingly pricing in the possibility of a de-escalation in Middle East tensions and a gradual restoration of oil flows through the Strait of Hormuz.
According to reports cited by Bloomberg and other market sources, Morgan Stanley now expects Brent crude to average $90 per barrel in the third quarter of 2026 and $80 per barrel in the fourth quarter. The bank had previously projected Brent at around $100 per barrel during the third quarter before reassessing its outlook following developments in U.S.-Iran negotiations.
Analysts at the bank noted that while significant uncertainties remain, recent diplomatic advances represent an important step toward reducing geopolitical risks and supporting higher crude exports from the Gulf region.
Goldman Sachs also lowered its price expectations, cutting its fourth-quarter Brent forecast to $80 per barrel from $90 per barrel. The investment bank further reduced its 2027 average Brent estimate to $75 per barrel, down from its earlier projection of $80 per barrel.
The bank said it expects shipping activity through the Strait of Hormuz to recover fully by the end of July if negotiations continue to progress and the proposed agreement is successfully implemented.
Among the major financial institutions, Citi adopted the most bearish outlook.
The bank reduced its third-quarter Brent forecast to $75 per barrel and expects prices to average $70 per barrel during the final quarter of the year. For 2027, Citi projects Brent crude at an average of $65 per barrel, significantly below its previous estimate of $80 per barrel.
The forecast revisions follow reports that Washington and Tehran have made progress toward a framework agreement aimed at reducing tensions in the Gulf region.
Market sentiment improved after indications that a memorandum of understanding between both countries could pave the way for the reopening of the Strait of Hormuz, one of the world's most important energy transit routes.
Oil prices have responded sharply to the changing geopolitical outlook.
Brent crude recently fell below the $90-per-barrel threshold and touched its lowest level since March as traders reassessed supply risks associated with the Middle East conflict. U.S. benchmark West Texas Intermediate also recorded significant declines amid expectations that global crude flows could normalise if an agreement is reached.
The Strait of Hormuz remains a critical artery for global energy trade, carrying roughly one-fifth of worldwide oil and liquefied natural gas shipments. Any sustained improvement in shipping access through the corridor is expected to ease supply concerns that had previously supported higher crude prices.
While banks have become more cautious on oil prices, analysts continue to warn that risks remain. Final terms of any agreement have yet to be concluded, and any setback in negotiations could quickly alter market sentiment.
For now, however, the revised forecasts suggest growing confidence among major financial institutions that geopolitical tensions in the Middle East may ease sufficiently to reduce the risk premium that has supported crude prices in recent months.