Morgan Stanley cuts European energy sector as Hormuz deal caps oil-price upside in Oil & Companies News 22/06/2026 Morgan Stanley downgraded European energy equities to “equal-weight” from “overweight” on Friday, citing the partial reopening of the Strait of Hormuz under a U.S.-Iran memorandum of understanding and a structural deterioration in the earnings outlook for the sector. The move dropped energy from fourth to ninth place in the broker’s European sector model. The trigger was a doubling of the Strait of Hormuz reopening sensitivity component within the model, which had carried a weight of 8% prior to the deal announcement. Morgan Stanley said the adjustment reflected the recent deal’s implications for oil prices and energy equity relative performance. The broker’s historical analysis of geopolitical escalation periods, spanning the 1973 Oil Embargo, the Iranian Revolution, the Gulf War, the Iraq War, and the Russia-Ukraine conflict, showed that energy equities “tend to steadily underperform the index after passing peak geopolitics-driven oil prices,” according to the broker. The current escalation cycle is following that same pattern, with relative performance already turning lower following the oil price peak. Consensus European energy models assume an average 2026 price of $88.50 per barrel, implying $83 per barrel for the remainder of the year. At the time of writing, dated Brent stood at $77 per barrel. Morgan Stanley’s oil strategists see Brent “fundamentally anchored to c. $80/bbl from 4Q through 2027,” the broker said, underpinning the equal-weight call. Source: Investing.com 2026-06-22 hellenicshippingnews... tweet Share