Key Moments
- ING’s Warren Patterson raises Brent price projections, citing persistent tightness in crude and refined product markets as Persian Gulf exports hold near half of pre-war volumes.
- The central scenario anticipates Brent averaging $80/bbl in the fourth quarter, compared with a prior forecast of $74/bbl.
- Year-end Brent outcomes now range from $75/bbl to $104/bbl across optimistic and pessimistic cases, driven by potential disruptions to Hormuz and bypass routes and the timeline of any US-Iran agreement.
Revised Brent Outlook on Constrained Gulf Flows
ING analyst Warren Patterson has increased oil price forecasts, pointing to a tighter environment in both Brent and refined products as Persian Gulf exports continue to run at roughly 50% of their pre-war level. The revised projections show a higher base case for Brent into the fourth quarter, alongside a wide range of alternative paths that reflect geopolitical and logistical uncertainty in the region.
Uncertain Flow Data Through the Strait of Hormuz
Patterson notes that gauging actual crude flows from the Persian Gulf is complicated by vessel tracking limitations. According to the analysis:
“Nevertheless, Persian Gulf producers appear increasingly willing to move oil through the Strait and offer more barrels outside it. Tracking remains difficult because vessels often switch off transponders during transit. US officials estimate flows near 10m b/d, while shipping trackers put them at 4-8m b/d, with estimates recently edging higher. Because a very large crude carrier can hold about 2m barrels, missing one or two vessels can materially distort daily estimates.”
Against this backdrop of measurement uncertainty, the working assumption in the ING framework is summarized as follows:
“We assume Hormuz flows of around 5m b/d. Including pipeline bypass volumes, total Persian Gulf oil exports are roughly 50% of pre-war levels.”
Three Brent Price Paths Into Year-End
The ING outlook sets out three distinct scenarios for Brent prices into year-end, anchored in differing expectations for Persian Gulf export flows, the status of the Strait of Hormuz and bypass infrastructure, and the timing and scope of any potential US-Iran arrangement.
| Scenario | Key Assumptions | Gulf Export Levels by Year-End | Q4 Brent Average |
|---|---|---|---|
| Base case | “Stalemate persists until shortly before the November US mid-term elections, followed by a limited stabilisation agreement covering Hormuz, military de-escalation and possible sanctions relief.” | “Persian Gulf oil flows remain near 50% of pre-war levels in October, then recover to about 90% by December, including bypass volumes.” | “Brent averages $80/bbl in the fourth quarter, up from our previous forecast of $74/bbl.” |
| Pessimistic case | “Escalation increasingly disrupts Hormuz and bypass routes.” | “Year-end flows near 50% of pre-war levels.” | “Lifting fourth-quarter Brent to an average of $104/bbl.” |
| Optimistic case | “A September agreement restores flows to pre-war levels by year-end.” | “Flows to pre-war levels by year-end.” | “With Brent averaging $75/bbl in the fourth quarter.” |
Implications for Oil and Product Markets
Across all three scenarios, Patterson emphasizes the influence of constrained Persian Gulf exports on the tightness of Brent and refined product markets. The range of possible outcomes for flows through Hormuz and via pipeline bypass routes, together with the uncertain timing and nature of any US-Iran understanding, underpins a wide dispersion in potential fourth-quarter Brent price averages, from $75/bbl in the optimistic case to $104/bbl in the pessimistic case.
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