Morgan Stanley has slashed its oil price target, citing a faster-than-anticipated recovery in shipping traffic through the Strait of Hormuz.
The bank’s revised outlook marks the second downward adjustment to its energy forecasts in roughly two weeks, signaling that the market’s pricing of geopolitical risk is unwinding more quickly than many strategists had modeled.
The move reflects a tangible shift in the physical flow of energy.
While earlier reports indicated that Hormuz traffic remained depressed at around 40 ships, with a persistent geopolitical risk premium weighing on prices, Morgan Stanley’s latest analysis suggests that normalization is accelerating.
This divergence between the initial shock and the current operational reality is forcing a repricing of the risk premium embedded in crude valuations.
S&P Global Ratings has echoed the caution, warning that while the official reopening of the Strait reduces immediate tail risks for global trade, the full normalization of supply chains will be a costly and uneven process.