Doha: Major global investment banks, including Morgan Stanley and Goldman Sachs cut their forecast for oil prices following the preliminary agreement between the US and Iran to reopen the Strait of Hormuz and end the war, amid expectations that oil flows and Gulf exports will return to normal levels in the coming months.

According to Qatar News Agency, Goldman Sachs cut its forecast for Brent crude in the fourth quarter of this year to $80 per barrel, down from $90 previously. It also lowered its estimate for the average price in 2027 to $75 from $80. The bank expects Gulf exports to return to pre-war levels by the end of July, compared with earlier projections that pointed to the end of August. It also expects West Texas Intermediate crude to average $75 per barrel in the final quarter of the year and $70 in 2027.

For its part, Morgan Stanley also lowered its Brent crude forecast in the fourth quarter of this year by $15 to $80 per barrel, noting that the return of oil tanker movements to normal could take several weeks, with the expectation of the return of 50% of the affected production by September and 80% by December.

Oil prices declined following the announcement of the agreement, with Brent crude falling by about 5% to its lowest level since March, as markets bet on easing geopolitical risks and the return of supplies through one of the world's most important maritime routes for oil and gas transport.

Citi bank has also cut its oil price forecast to $75 per barrel of Brent in the third quarter of this year, and $70 in the final quarter. For 2027, Citi expects an average Brent price of $65 per barrel, compared to its earlier forecast of $80.

Citi said its new base case, which it assigns a 60 percent probability, assumes the signing of a memorandum of understanding and the return of commercial flows through the Strait of Hormuz to largely normal levels between mid-to-late July.

As for metals, Citi raised its forecast for gold prices over the next three months to $4,500 per ounce from $4,000, and increased its silver forecast to $70 per ounce from $60, while maintaining its projection for gold to reach $5,000 per ounce within a period of 6 to 12 months, while warning of continued market volatility.