BofA Sees Chance of $150 Oil on Critical Infrastructure Risk

Summary

Francisco Blanch of BofA Securities discusses how Middle East conflict has shifted the oil market from a petroleum-product shortage to an increasingly tight crude market. He outlines BofA scenarios for Brent averaging $95, $120, or $150 depending on the war path and infrastructure damage, and sees higher forward oil prices in 2027-2028. He also notes spiking TTF natural gas prices and large premiums in Asian and African physical crude.

• BofA's Francisco Blanch sees oil market tightening as crude shortage grows.
• Brent scenarios include $95 if skirmishes continue, $120 in protracted war, and $150 if critical infrastructure is permanently hit.
• Spot oil could overshoot scenario averages; physical Asian and African crude trades at large premiums.
• More than 1 billion barrels of inventories have been drawn in six months.
• Higher forward oil prices are expected in 2027 and 2028 on inventory refill and infrastructure risk.
• TTF natural gas has spiked above EUR 85/MWh, equivalent to about $180 per barrel in oil terms.
• The discussion covers Middle East chokepoints including Hormuz and the East-West pipeline.