ING raises Brent crude outlook to $104 amid Hormuz tensions

Dutch bank ING has revised higher its crude oil price forecasts due to the prolonged blockade of the Strait of Hormuz following US and Israeli strikes on Iran.

The bank now expects ICE Brent to average $104 per barrel in the second quarter of 2026, up from $96 previously. 

It also lifted its fourth-quarter 2026 forecast to $92 per barrel, from $88. At the time of writing, Brent crude oil was at $104.60 per barrel, up 2.9%, while West Texas Intermediate crude was 2.6% higher at $98.81 a barrel.

Eight weeks have passed since the strikes, which triggered the ongoing blockade of the Strait of Hormuz a critical chokepoint that previously carried around 20 million barrels per day of oil.

Supply disruptions deepen

After accounting for some pipeline diversions and limited tanker traffic, around 14 million b/d of oil supply remains disrupted.

Over the first two months of the conflict, roughly 850 million barrels of supply have already been lost.

Warren Patterson, head of commodities strategy at ING Economics, said the bank had initially expected a gradual resumption of flows through the Strait of Hormuz in April.

That has not happened.

This slower recovery has prompted ING to update its base case assumptions.

“Our new base case sees ICE Brent averaging $104/bbl ($96 previously) over 2Q26, while the significant inventory drawdown and slow recovery towards pre-war flows sees Brent averaging $92/bbl ($88/bbl previously) over 4Q26,” he added.

Oil prices are likely to remain relatively well supported for the foreseeable future, a situation underpinned by low inventories and the ongoing requirement for restocking, whether for commercial supplies or strategic reserves.

“The upside risks to this assumption are a near full closure of the Strait of Hormuz persisting through May, which would likely see Brent finding a floor above $100/bbl for the remainder of the year,” Patterson added. 

A significant risk is a renewed escalation that could nearly halt oil supply by the end of the second quarter in 2026.

If Saudi shipments via the Red Sea and UAE exports from Fujairah are disrupted, oil prices could hit new record highs, Patterson said.

Demand destruction already visible

There has been debate about whether current prices are high enough to trigger sufficient demand destruction.

Patterson noted that focusing only on crude prices misses the bigger picture.

“The surge in product cracks mean that refined product prices have seen significant more strength and will be driving demand destruction already,” he said.

ING estimates that flight cancellations, lower petrochemical plant run rates, and energy-saving measures especially in Asia have already led to around 1.6 million b/d of demand destruction.

“While this is meaningful, it would be insufficient if supply disruptions persist,” Patterson said. 

Patterson warned that if the disruption becomes more prolonged, “substantially higher oil prices across both crude and refined products would still be required to drive additional demand destruction.”

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