HSBC Adjusts 2026 Brent Crude Forecast to $90 Amid Ongoing Strait of Hormuz Crisis

HSBC has increased its 2026 Brent crude price forecast from $80 to $90 per barrel, attributing this adjustment to the escalating crisis in the Strait of Hormuz. Senior oil analyst Kim Fustier noted that the oil markets are unlikely to rebalance until mid-2027, indicating prolonged supply stress that extends beyond the energy sector.

Currently, Brent crude is trading above $100 per barrel, influenced by rising shipping attacks in the region. This revised forecast suggests that HSBC perceives elevated prices as a structural issue rather than a temporary spike.

The Hormuz Bottleneck

The Strait of Hormuz, a critical waterway between Iran and Oman, typically facilitates about a fifth of the world's daily oil consumption. Presently, oil flows through the strait have stabilized at approximately 6 million barrels per day, significantly lower than pre-conflict levels, which has drastically altered global supply dynamics.

A memorandum of understanding between the US and Iran aimed at stabilizing oil transit collapsed in July 2026, removing a key source of optimism for a near-term resolution. HSBC anticipates that oil flows will gradually recover to 8 million barrels per day by the end of 2026 and 9.5 million barrels per day by mid-2027, although these figures remain well below historical norms.

Revised Price Projections

In addition to the 2026 forecast, HSBC has raised its 2027 Brent outlook to $85 per barrel, up from $65. The bank's long-term assumption for 2028 and beyond is set at $75 per barrel, indicating expectations of some normalization in prices but not a return to the sub-$70 environment seen in more stable times. In a scenario where diplomatic efforts continue to falter, Brent prices could potentially surge to $120 per barrel before stabilizing in 2027.

New Developments in Oil Markets

The price of West Texas Intermediate (WTI) crude oil has surged past $101 per barrel, coinciding with the Strategic Petroleum Reserve nearing a historically low level. This situation raises concerns over tightening global oil supplies, potentially influencing market confidence in future oil price movements.

Market activity indicates an increased likelihood of crude oil reaching new all-time highs by December 31, with the probability rising from 11% to 13.5%. Analysts are closely monitoring announcements from key figures such as OPEC’s Secretary General and Saudi Energy Minister, as changes in production levels and geopolitical developments could significantly impact market dynamics.

As the Strategic Petroleum Reserve continues to decline, market participants are reassessing the potential for higher oil prices, particularly in light of ongoing geopolitical tensions and production adjustments.