Mumbai: Oil prices face further upside risks in the coming months as a combination of geopolitical disruptions, constrained shipping, reduced refining capacity and declining inventories leaves global oil markets increasingly tight, Morgan Stanley said in its latest research report.
The global brokerage firm has retained its average Brent crude forecast at USD 100 per barrel for the fourth quarter of 2026, while cautioning that the quarterly average does not rule out prices moving higher at times.
It said risks to the forecast are already "skewing to the upside" following a fresh round of disruptions.
Morgan Stanley said oil and gas markets are currently facing an unusually large number of disruptions simultaneously, including constrained exports through the Strait of Hormuz, reduced flows through the Bab el-Mandeb and the shutdown of Saudi Arabia's East-West pipeline.
The brokerage in its report also highlighted disruptions linked to the Panama Canal and historically low water levels on the Rhine, which have affected refined-product shipments into Europe.
At the same time, tight tanker availability has pushed freight rates to record levels, limiting the ability of regional markets to arbitrage supply shortages.
The situation could become more challenging as the buffers that have helped the oil market absorb disruptions begin to weaken.
Morgan Stanley said high US exports, subdued Chinese imports and ample inventories had helped the market manage the disruptions over the past six months.
