• Brent crude surged toward about $125 per barrel as disruptions in the Strait of Hormuz persist, with ongoing concerns about a substantial supply gap and limited rerouting options for key producers.
  • Societe Generale raised its Brent forecast for April, signaling a tighter market and heightened price risk due to potential continued chokepoint constraints.
  • Analysts say flows through Hormuz remain at crisis levels, leaving a roughly 15 million barrels per day gap in global supply, with only limited rerouting by Saudi Arabia and the UAE, and occasional Iranian shipments.

Brent crude prices are climbing toward $125 per barrel, driven by persistent disruptions in the Strait of Hormuz that show no signs of abating into next month. Societe Generale, a major French multinational bank, has revised its forecast upward, expecting prices to average $125 in April, according to people familiar with the matter. This adjustment reflects growing market anxiety over a supply shortfall that analysts estimate at around 15 million barrels per day, as the critical chokepoint remains largely stalled.

Efforts to reroute shipments have hit a snag, with Saudi Arabia and the UAE managing only limited alternatives, while occasional Iranian shipments provide scant relief. Without a swift resolution, the global oil market could face prolonged tightness, pushing prices even higher. A source close to the situation noted that the disruption has tightened financing conditions for energy trades, adding pressure to an already volatile landscape.

In response to inquiries, Societe Generale declined to comment on specific forecasting details, but market watchers point to the bank's cautious revenue growth in markets trading amid these turbulent conditions. The bank frequently adjusts its teams in response to such shifts, though no dramatic leadership overhaul has been tied to this forecast update. Meanwhile, European economies, particularly energy importers, are bracing for higher near-term costs that could ripple into inflation and consumer prices.

Political tensions in the region continue to amplify risk premia, with governments reassessing energy-supply resilience strategies. Historical precedents suggest that similar Hormuz-related disruptions have led to short-term spikes, but the current scenario's duration could have more lasting effects. If the disruption persists for another 2-4 weeks, Brent could average in the mid-to-high $120s, with brief excursions above $130 possible if market fear intensifies or spare capacity proves insufficient.

Correction: An earlier version of this article misstated the exact supply gap; it has been updated to reflect the analyst estimate of roughly 15 million barrels per day.