Choice Broking keeps FY27 Brent forecast at $82 as Hormuz risks offset Iranian stocks
Choice Broking expects Brent crude to average $82 per barrel in FY27. The brokerage sees upside risk from disruption at the Strait of Hormuz and Bab el-Mandeb, while 135 million barrels of Iranian crude stored on ships could trigger a sharp price decline if exports recover.
Brent forecast held at $82 per barrel
Choice Broking has maintained its forecast for Brent crude to average $82 per barrel in FY27, with the market facing substantial risks in both directions. Business Standard Hindi reported that the brokerage is monitoring tanker traffic through the Strait of Hormuz and Bab el-Mandeb, where a prolonged disruption could restrict crude and refined-product supplies.
According to the report, a complete closure of the two routes could affect exports of about 18 million barrels per day of crude oil and around 5 million barrels per day of petroleum products. Other producing countries could replace part of the lost supply, but Choice Broking estimates that the effective crude shortage could still reach 11 million to 13 million barrels per day. If the current disruption lasts more than two weeks, Brent could rise above the brokerage’s FY27 forecast.
Iranian oil creates a downside risk
The bullish shipping scenario is balanced by a large volume of Iranian crude held at sea. Iran’s crude stored aboard vessels increased 14% in one month to 135 million barrels, according to Choice Broking. The brokerage attributed the accumulation to renewed US pressure, which has slowed Iranian exports and delayed the delivery of oil that had already been intended for sale.
This inventory does not represent newly produced supply entering the system. However, if obstacles to Iranian exports ease, much of the stored oil could reach buyers within a relatively short period. Choice Broking said such a sudden increase in available crude could put heavy pressure on prices and cause a sharp decline lasting one to two weeks. Traders therefore face opposing event risks: a shipping interruption could remove large daily volumes, while the release of Iranian floating stocks could rapidly loosen the physical market.
US crude builds as fuel supplies tighten
US inventory data present another mixed picture. Crude stocks have increased across most regions, while inventories at Cushing, the country’s main oil storage hub, have moved back above 20 million barrels. Business Standard Hindi said the increase was driven in part by higher crude arrivals from Canada.
Conditions are tighter in refined products. Record US diesel exports have pushed distillate inventories to their lowest seasonal level since 1996. Gasoline production also remains weak and, amid subdued summer driving demand, is near the seasonal lows recorded around 2020. Choice Broking said very low distillate stocks and limited gasoline output indicate that product supply remains constrained.
Refining margins may remain supported
Petroleum-product shipments from the United States, West Asia, Russia and Asia to Europe continue to reduce availability in their originating markets. The brokerage expects this situation to support Asian refining margins, potentially benefiting the earnings of Indian refiners CPCL and MRPL.
The outlook leaves refiners, traders and physical crude buyers exposed to different parts of the oil balance. High US crude inventories can soften immediate feedstock tightness, but low fuel stocks support product cracks and refinery economics. Meanwhile, the duration of shipping disruption and the timing of any release of Iran’s 135 million barrels of floating crude are likely to determine whether Brent trades above or below the $82 FY27 average projected by Choice Broking.