Investment bank Morgan Stanley has warned that temporary market cushions currently limiting a sharper surge in crude oil prices could disappear if the Strait of Hormuz remains shut beyond June, potentially triggering a major spike in global oil prices.
According to the bank’s commodity analysts, the global oil market is currently relying on a combination of weaker Chinese crude imports and stronger United States oil exports to soften the impact of the ongoing supply disruption caused by the closure of the strategic shipping route.
However, analysts cautioned that those balancing factors may only provide short-term relief.
In a market note referenced by Bloomberg, Morgan Stanley stated that if the Strait of Hormuz remains inaccessible into late June or July, the available supply buffers would likely be exhausted, leaving crude prices vulnerable to a stronger upward rally.
The bank noted that the timing of any reopening remains critical to market stability, explaining that an earlier resolution would allow existing supply adjustments from major economies to continue absorbing part of the shock.
Analysts added that a prolonged closure could force Brent crude prices to react more aggressively as physical supply tightens across global markets.
Despite the warning, Morgan Stanley maintained its existing oil price outlook for 2026, projecting that Dated Brent crude would average around $110 per barrel during the current quarter before easing to approximately $100 in the third quarter and $90 by the final quarter of the year.
The bank nevertheless warned that a deeper supply imbalance could push prices significantly higher if both the United States and China exhaust their ability to offset the disruption through export and import adjustments.
Under such a scenario, the bank estimated that Brent crude prices could climb as high as $150 per barrel.
The latest warning comes amid increasing concerns over tightening global oil inventories and growing pressure on supply chains linked to the ongoing geopolitical tensions in the Middle East.
Separately, Goldman Sachs recently warned that global oil stockpiles are falling rapidly and approaching their lowest levels in nearly eight years.
Analysts at the bank reportedly noted that although inventories are not yet expected to fall below minimum operational thresholds during the summer period, the pace of depletion remains concerning and leaves the market increasingly exposed to further supply shocks.
Market sentiment also remained cautious following reports that U.S. President Donald Trump rejected Iran’s response to a U.S.-backed peace proposal, reducing expectations for a near-term resolution to the crisis affecting the Strait of Hormuz.
The Strait of Hormuz remains one of the world’s most critical energy transit routes, handling a significant share of global crude oil exports, particularly from the Middle East. Analysts say any prolonged disruption to shipments through the corridor could have far-reaching consequences for fuel prices, inflation and energy security across major economies.