Goldman Sachs has elevated its oil forecasts for the year as the Strait of Hormuz remains closed and prices continue to be elevated.
The company said in a note it now expects Brent prices to stand at $90 by the fourth quarter, compared to $80 in its last prediction.
Analysts Daan Struyven and Yulia Zhestkova Grigsby also elevated its forecasts for the Brent and the West Texas Intermediate for the second and third quarters of the year.
"We estimate that a loss of production of 14.5 million barrels per day in the Persian Gulf are leading global inventories to retreat at a record pace of between 11 and 12 million barres per day in April," the analysts said. They went on to claim that such a scenario is "not sustainable."
Oil prices continued to rise on Monday, with the Brent crude topping $107 a barrel. The West Texas Intermediate rose above $95.
Warren Patterson, head of commodities strategy at Dutch bank ING, said in a research note cited by CNBC that "oil s trading stronger this morning after attempts to get US-Iran peace talks back on track broke down, erasing hopes for a resumption of energy flows through the Strait of Hormuz anytime soon."
"The lack of progress means the market is tightening every day, requiring oil prices to reprice at higher levels," Patterson added.
The latest development in the war involves a new report claiming that Iran sent the U.S. a new proposal to end the war and reopen the Strait of Hormuz after the weekend failed to produce any progress in negotiations.
Axios detailed that the proposal contemplates the two topics but would leave nuclear negotiations for a later stage, bypassing the most sticking point of talks between the countries to reach a deal more quickly.
The ceasefire would lead to the end of hostilities and the reopening of the key waterway, lasting for an extended period and allowing for nuclear talks to be continued later.
President Donald Trump, the outlet added, has not given a response to the proposal, which would remove the U.S.'s most important leverage to guarantee the removal of Tehran's nuclear stockpile and guarantees that it won't continue enriching uranium or attempt to produce a weapon in the future.
The president is expected to hold a meeting in the Situation Room with top national security and foreign policy officials on Monday to assess the current situation and future steps.
Trump appeared to hint in an interview with Fox News that he intends to continue with the blockade of Iranian ports in the Strait of Hormuz to choke Tehran's finances and inventories. "They say they only have about three days before that happens," he said.
