Middle East Scenarios Bulletin

The report analyzes the economic impact of the recently signed US-Iran deal concerning the Strait of Hormuz. It outlines two scenarios—benign and adverse—evaluating the trajectory for oil prices, inflation, and growth in Australia and New Zealand.

Key Takeaways

• 1.A US-Iran deal has been reached to extend the ceasefire and reopen the Strait of Hormuz, though full recovery of shipping and production will be gradual.
• 2.The report presents two scenarios: a benign path where prices trend toward $60/bbl by end-2027, and an adverse path where prices exceed $155/bbl due to prolonged disruption.
• 3.Australian and New Zealand economies face significant sensitivity to energy prices; an adverse scenario could drive Australian inflation to nearly 6%.

Table of Contents

• Key points
• Strait of Hormuz reopens but path to normal uncertain
• Benign scenario: Faster rebound in supply
• Economic impact
• Adverse scenario: Deal tested, disruption persists
• Oil prices lift to an average US$155p/b in Q3
• Corporate Directory
• Things you should know
• Disclaimer

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