Muscat: Leading global financial institutions, including Goldman Sachs, Morgan Stanley and Citi, have revised their oil price outlooks downward following the breakthrough agreement aimed at ending the conflict and restoring stability to one of the world’s most critical energy corridors.

Goldman Sachs lowered its forecast for Brent crude prices in the fourth quarter of 2026 to $80 per barrel, down from its earlier estimate of $90. The bank also reduced its average Brent forecast for 2027 to $75 per barrel from $80. It expects Gulf oil exports to return to pre-war levels by the end of July, earlier than previous projections that pointed to a recovery by the end of August.

The investment bank further forecast West Texas Intermediate (WTI) crude to average $75 per barrel in the final quarter of this year and $70 per barrel in 2027.

Morgan Stanley also cut its Brent crude forecast for the fourth quarter by $15 to $80 per barrel. While noting that a full recovery in oil tanker movements may take several weeks, the bank expects 50 per cent of disrupted production to return by September and around 80 per cent by December.

The announcement triggered a sharp reaction in global energy markets, with Brent crude prices dropping nearly 5 per cent to their lowest level since March. Investors responded positively to signs of reduced geopolitical risk and the anticipated return of oil and gas supplies through the Strait of Hormuz, a key route for global energy trade.

Meanwhile, Citi revised its Brent crude forecasts to $75 per barrel for the third quarter and $70 per barrel for the fourth quarter of this year. For 2027, the bank now expects Brent to average $65 per barrel, significantly lower than its previous projection of $80.

Citi said its base-case scenario, assigned a 60 per cent probability, assumes the signing of a memorandum of understanding between the parties and the restoration of commercial shipping through the Strait of Hormuz to near-normal levels by mid-to-late July.

While oil forecasts were lowered, Citi took a more bullish stance on precious metals. The bank raised its three-month gold price target to $4,500 per ounce from $4,000 and increased its silver forecast to $70 per ounce from $60.

Citi also maintained its longer-term projection that gold could climb to $5,000 per ounce within the next six to 12 months