Energy Shock Not Over, Multiple Investment Banks Warn of Third Quarter Oil Price Rebounding Above $90

June 15 — The US-Iran conflict is showing signs of cooling, which briefly stabilized the global energy market. But multiple investment banks and research firms are warning the energy shock’s fallout is far from over, and geopolitical risk premiums could stick around for a long while. Daniel Hynes, senior commodity strategist at ANZ Bank, said the Strait of Hormuz’s traffic hasn’t bounced back fully yet, with major hurdles still in place like mine risks and ship detentions. It could take weeks — even months — for shipping volumes to hit pre-conflict norms. He noted the oil market won’t be able to close the supply gap quickly until supply chains are back to normal. Westpac analysts add global oil inventories were drawn down sharply during the strait standoff, and the urgent need to restock will only make market tightness worse. Bart Melek, head of commodity strategy at TD Securities, predicts even if shipping bounces back to normal right away, the global oil market could still face a roughly 800 million barrel supply shortfall by November. He added current oil price levels aren’t high enough to balance future supply and demand. He also forecasts there’s a strong chance oil prices will climb above $90 per barrel in the third quarter, which could spark a wave of inflation across the broader economy. Willem Sels, chief investment officer at HSBC Private Bank, said this round of energy shock has hit vulnerable corners of the global economy, especially regions in South Asia. High oil prices will keep weighing on fragile economies’ recoveries, he noted. Overall, analysts widely agree even with conflict tensions easing, uncertainty around Strait of Hormuz risks and a slow supply recovery will keep global oil markets highly volatile, with risk premiums remaining elevated.