Greg Sharenow, Managing Director and Portfolio Manager at PIMCO believes that crude prices could stay in the three-digit range for an extended period, especially if supply flows remain restricted or only partially restored.He added, “We have many complications with opening up the Strait of Hormuz. We have a lot of tankers that are trapped in the Strait of Hormuz today. Normally, those tankers would be running in and out on a on a consistent basis. Now that virtual pipeline, the ship pipeline, has been closed.”
Sharenow pointed out that even if the situation around key supply routes improves, the road to normalisation is not straightforward. Logistics bottlenecks, trapped shipments, and already depleted inventories mean the system will take time to stabilise.
He said, “If we have a situation where by the end of May, we have full resumption, and we have visibility, I can easily see Brent prices returning to the $80 range. There’s going to be a massive amount of demand that needs to come back in to refill the supply pipeline, to rebuild inventories.”Brent crude climbed past $106 per barrel overnight, taking its weekly gains to around 16%.Read Here | Oil above $80/bbl may keep investors away from India: Mark MatthewsHe added that a return to the $60 range looks unlikely without a meaningful economic slowdown. At the same time, if supply does not fully recover, prices could continue to stay at current levels or even move higher.Sharenow believes a return to much lower price levels will take time. “$70 does feel like it’s a year plus more away.”On the demand side, there are few signs of weakness. Energy consumption continues to rise, supported by factors like AI-led power demand, defence spending, and ongoing investments in the energy transition.These trends are adding structural demand for commodities, including crude oil, making it harder for prices to correct meaningfully.On gas, Sharenow pointed out that the timing of the disruption worked in the market’s favour. Since it happened after peak winter demand, countries were able to manage with lower consumption due to warmer weather, preventing a sharper spike in prices.For the entire discussion, watch the accompanying videoFollow our live blog for more stock market updates
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