📝Do Not Expect Crude Oil Falling to Pre-War Levels: Danske Bank

The deal between the US and Iran is set to reopen the Strait of Hormuz for oil shipments. While it will take months to ramp up production and exports closer to normal capacity again, it greatly eases the supply constraint that has pressured the market since the beginning of March, when the war started.

The path for world oil supply over the coming months also depends on how long the US and others will continue to sell strategic reserves. There is less need for the emergency supply now, but the US may opt to continue the policy to please voters ahead of the mid-term elections in November.

We now forecast Brent crude to average USD80/bbl the rest of the year and rising to USD85/bbl next year. We do not expect Brent to return to the USD60-70/bbl level from before the war started. - Danske Bank