ANZ raises oil price forecasts on Middle East supply losses

April 14 (Reuters) - ANZ now expects Brent crude to end the year at $88 a barrel and remain above $90 a barrel for the rest of 2026, up from its earlier forecast that had assumed prices closer to $80, due to the loss of supply from the Gulf, it said on Tuesday.

The revision reflects export disruptions, logistics constraints and precautionary shut-ins by core Gulf producers that have sharply reduced supply even where production capacity has not been physically damaged in the U.S.-Israeli war with Iran, ANZ analysts said in a research note.

The war, which broke out on February 28, has resulted in the effective closure of the Strait of Hormuz, through which about one-fifth of global oil flows.

ANZ estimates that about 10 million barrels per day of crude supply have been effectively removed from the market relative to the bank's January baseline.

"The oil market no longer needs a worst-case escalation to justify higher pricing levels," the analysts said, adding that tight supply-demand balances alone could sustain Brent prices near or above current thresholds, even in the absence of further geopolitical risks.

While some supply could return to the market if security conditions improve, ANZ cautioned that any recovery is likely to be slow and uneven.

The bank said between 1 million bpd and 2 million bpd of output could face permanent or semi-permanent disruption due to reservoir damage, deferred maintenance, and financial challenges.

OECD commercial oil inventories were already near historically low levels before the disruptions, leaving limited room for stockpile releases to stabilise prices, ANZ said. Without a sharp drop in global demand, the bank said the market may need price-driven demand destruction to rebalance, keeping volatility high into 2027.

Benchmark Brent crude futures LCOc1 settled on Monday at $99.36 per barrel, while U.S. West Texas Intermediate (WTI) futures finished at $99.08 per barrel.