Bank of America’s Brent Base Case Is 83 Dollars and Its Tail Scenario Is 80 Percent Higher
Bank of America put Brent at 83 dollars a barrel for the second half of this year and 75 dollars for 2027, CNBC reported on Tuesday, citing continued disruption to flows through the Strait of Hormuz.
The same note carries two scenarios that sit far above both. If clashes affecting oil flows continue to the end of the year, the bank sees Brent between 95 and 120 dollars. In a wider conflict causing major damage to energy infrastructure, it sees up to 150.
The gap between the base case and the scenarios is the whole story
| Bank of America, as reported | Dollars a barrel | Distance from the 83 dollar base case |
|---|---|---|
| Wider conflict scenario | up to 150 | 67 above, or 80.7 percent |
| Prolonged disruption scenario | 95 to 120 | 12 to 37 above, or 14.5 to 44.6 percent |
| Base case, second half of 2026 | 83 | |
| Base case, 2027 | 75 | 8 below, or 9.6 percent |
Figures as reported. Distances are on our calculation. The bank publishes no research to the public, so no underlying note is available.
Three things follow from the shape of it, and none needs a market price to see.
The bank’s own disruption scenario starts 12 dollars above its base case, on our calculation. There is no overlap between the two: the floor of the range it describes as conditional is 14.5 percent above the number it describes as expected. A forecaster who thought the disruption likely to persist would not leave that gap.
The tail is wide. At 150 dollars the escalation case is 80.7 percent above the base case and exactly double the 2027 forecast, on our calculation. The scenario band itself spans 25 dollars, which is 30.1 percent of the base case.
And the base case falls over time. The 2027 figure of 75 dollars is 8 dollars, or 9.6 percent, below the 2026 second half figure, on our calculation. So the bank’s central expectation is that the disruption premium unwinds and then some, even as it sketches a case in which the barrel doubles.
For context and not for comparison, Brent settled at 97.31 dollars on 7 September, in the commodities wrap we published that day. That is one settlement of one futures month, and the bank’s figures are averages over a half year and a calendar year, so the two are different objects and the difference between them is not a spread. The honest statement is narrower: the market’s most recent close sits inside the range the bank calls conditional, and above the number it calls its base case.
The bank gives one reason for the level, and it is the same in both the 2026 and 2027 lines: disruption to flows through the Strait of Hormuz and continuing tension affecting oil movements. No supply or demand balance is published alongside the numbers.
Why it matters: Forecasts are usually read for their direction. This one is worth reading for its structure, because the distance between an 83 dollar base case and a 95 dollar scenario floor is a statement about how likely the bank thinks the disruption is to last, and it has left no overlap between the two. For a Gulf producer the useful number is not the tail but the 2027 line, which is the bank saying it expects the barrel lower in 18 months than in the half now running.
Outlook: The bank has given itself three distinct levels and the next revision will show which one it is converging on. A base case moved up toward the scenario band would mean it has accepted the disruption as durable. A scenario band narrowed or withdrawn would mean the opposite.
Sources: CNBC, AFP, The Edge.
