A geopolitical stalemate in the Middle East is likely to keep Persian Gulf oil flows constrained into 2027, ANZ Research said in a note on Friday.

The US' naval blockade of Iranian ports remains in place, and no negotiations are currently scheduled. Tensions across the broader Middle East have also intensified. Attacks on vessels attempting to use a US-supported shipping route near Oman have continued.

Measured against February's output, the conflict has displaced over 1.9 billion barrels of crude oil supply from Persian Gulf producers since March. Cumulative losses are expected to exceed 2 billion barrels by the end of October and total 2.3 billion to 2.4 billion barrels for the year.

Under the bank's base case scenario, crude oil supply in August is expected to be slightly lower than in July, with further falls in September as output from Iran and Saudi Arabia declines. A gradual reopening is expected late in the December quarter. A full return to pre-war throughput is not expected until late March 2027 quarter or early June 2027 quarter.

As shipping companies adapt to operating in a higher risk environment, selective crossings, the ongoing shuttle system and other mechanisms could lift oil flows to 6 million barrels per day by the end of the year and around 11 million barrels per day by the end of the June 2027 quarter.

Global product inventories have fallen to 1.8 billion barrels from 2.05 billion barrels over the past six months. Inventory releases and China's sharp reduction in crude oil imports cushioned the initial supply shock, but those buffers are rapidly diminishing. Supply is recovering only gradually, and demand destruction will be needed to rebuild inventories and ease prices.

The bank raised its Brent crude oil forecast to $95 per barrel in the short term, with upside risk if the Middle East conflict intensifies.