Societe Generale’s commodity team has highlighted significant volatility in Brent crude oil prices, driven by uncertainty surrounding the reopening of the Strait of Hormuz. According to their analysis, Brent has recently lost its 50-day moving average for the first time since January and is currently testing support around $96 per barrel. The team notes that the low reached earlier in May, approximately $96, serves as interim support, and if this level fails to hold, Brent could trend lower toward $91/$90 and potentially $86 per barrel, following the ascending trend line drawn since March [1].
Societe Generale outlines several scenarios based on the timing of the Strait of Hormuz reopening. An early resolution in June could see Brent prices decline steadily to around $85 per barrel by year-end. In contrast, a later reopening could result in price spikes toward $150–$160 per barrel. The team also considers a low-probability scenario where the Strait remains closed until year-end, which could push Brent prices above $200 per barrel [1].
The analysis underscores the wide range of possible outcomes for Brent, with market direction highly sensitive to geopolitical developments in the region. The loss of technical support levels and the mapping of various reopening timelines suggest heightened market risk and potential for significant price swings in the coming months [1].
CONCLUSION
Societe Generale’s analysis points to high uncertainty and potential volatility in Brent crude prices, with outcomes ranging from a steady decline to $85 per barrel to a spike above $200, depending on the Strait of Hormuz situation. Market participants should closely monitor geopolitical developments, as these will be key drivers of oil price movements in the near term.