Investors trying to assess just how close U.S. and Iran are to some kind of peace deal can expect two scenarios to play out, in regards to oil, according to Bank of America Securities. The hope that some memorandum of understanding between the two countries could be reached drove oil prices lower in recent days. International benchmark Brent crude futures fell to as low as roughly $94 a barrel this week, and U.S. crude futures dipped to around $89 a barrel. But the latest U.S. strikes in Iran have revived fears of an accelerating conflict in the region, that could keep the Strait of Hormuz closed and oil prices elevated. On Thursday, Brent crude futures were last roughly $97 a barrel, while WTI crude futures were above $91 per barrel. Bank of America Securities outlined two possible outcomes in its baseline scenario for what comes next. A peace deal that leads to a full reopening of the Strait is reached, allowing Brent crude futures to average $82 per barrel for 2026. A peace deal that leads only to a partial reopening of Hormuz, meaning a return to just 50% to 75% pre-war levels through year-end, could keep Brent prices at $103 per barrel on average this year. “The question is, of course, whether any reopening of the Strait is full or partial, as inventories have provided most of the cushion for now and could collapse below 2022 levels by 4Q26 if Hormuz remains closed,” Francisco Blanch, commodity and derivatives strategist at Bank of America Europe, wrote on Wednesday. The strategist specified that he’s maintaining an average baseline of $92.50 per barrel for Brent crude futures for this year, saying that he doesn’t expect any collapse of Brent crude prices to pre-war levels. He expects any reopening of the Strait will unleash a surge in demand for oil barrels over the next 18 to 24 months that will keep prices elevated.
