Brent Price Forecasts Soar to $90, HSBC Warns: Risk of $120

Oil prices are on the rise. Brent has surpassed $100 per barrel, driven by a military escalation between the United States and Iran that is reshaping global energy scenarios, and HSBC has just revised its Brent price forecasts for the next two years upwards. The British bank has raised its estimate for 2026 from $80 to $90 per barrel, a leap that indicates how the crisis in the Strait of Hormuz has become a structural issue, no longer just a transient episode.

Summary

• HSBC revises Brent price forecasts amid crisis in the Strait of Hormuz
• High Brent prices reflect structural tension on supply
• Effects of the crisis in the Strait of Hormuz on global oil supply
  • Supply disruptions and diplomatic difficulties
  • Expected timelines for oil flow recovery
• Market scenarios and price volatility risks
  • Price spike risks if diplomatic negotiations fail
  • Expectations for price normalization in the long term
• FAQ
  • Why did HSBC raise its Brent price forecasts for 2026?
  • How much has oil flow through the Strait of Hormuz decreased?
  • What are the forecasts for the recovery of oil flow through the strait?
  • What could happen if diplomatic negotiations continue to fail?

HSBC revises Brent price forecasts amid crisis in the Strait of Hormuz

HSBC's revision reflects the belief that high prices are not a temporary spike, but the new market equilibrium. The bank's senior analyst, Kim Fustier, warned that the oil market will not return to equilibrium before mid-2027, a horizon that significantly extends the crisis timeline compared to initial expectations.

It's not just 2026 that has been revised. HSBC has also sharply raised its outlook for 2027, bringing it to $85 per barrel from $65, a twenty-dollar increase that signals how the bank views supply tensions as lasting. For 2028 and beyond, however, the estimate settles at $75, a level indicating a partial normalization expectation but not a return to prices below $70 that characterized calmer periods.

High Brent Prices Reflect Structural Tension on Supply

The fact that HSBC's new estimates remain below current spot prices, with Brent trading above $100, says a lot about the nature of the crisis. This is not a forecast that chases the market, but an attempt to estimate where prices will stabilize once the acute phase of the confrontation has eased.

Effects of the Crisis in the Strait of Hormuz on Global Oil Supply

The Strait of Hormuz, the maritime corridor between Iran and Oman through which about one-fifth of the world's daily oil consumption normally passes, has become the true epicenter of the energy crisis. Flows through the strait have stabilized around 6 million barrels per day, just 30% of pre-conflict levels: a collapse that has disrupted global supply balances.

Supply Disruptions and Diplomatic Difficulties

In July 2026, a memorandum of understanding between the United States and Iran aimed at stabilizing oil transit through the Strait collapsed. This diplomatic failure extinguished the market's main source of optimism for a short-term resolution, and Fustier's estimates reflect the consequences.

Since then, the situation has further deteriorated. Reports indicate that the United States struck three Iranian oil tankers in response to Iranian missile attacks on two U.S. warships, while Tehran allegedly attempted a second, publicly unannounced attack on U.S. Navy vessels. The Iranian Foreign Ministry described the attack on the tankers as a "war crime" and an act of "economic warfare." Meanwhile, Iranian-linked Houthi militants have targeted energy facilities in Saudi Arabia, causing fires and temporary shutdowns of some operations: over 70 civilians were reported injured in the attacks, according to the Saudi Foreign Ministry.

Expected Timelines for Oil Flow Recovery

Despite the complicated landscape, HSBC maintains a gradual recovery hypothesis: flows are expected to rise to 8 million barrels per day by the end of 2026 and to 9.5 million by mid-2027. Even in this relatively favorable scenario, transit volumes would remain well below historical averages for over a year, explaining why the Hormuz Strait oil crisis continues to weigh on the medium-term estimates of all investment banks.

Market Scenarios and Price Volatility Risks

The most concrete risk for operators is a new price surge if diplomatic negotiations fail further. In the prolonged stalemate scenario outlined by HSBC, with transit still depressed and no agreements in place, Brent could reach $120 per barrel before easing throughout 2027.

Price Spike Risks if Diplomatic Negotiations Fail

HSBC is not the only one seeing this danger. Goldman Sachs has also raised its estimates, projecting Brent at $85 and WTI at $80 for December 2026, with targets of 80 and 75 dollars for 2027, respectively. The bank warned that Brent could exceed $120 in 2027 if Gulf production remained 4 million barrels per day below pre-war levels, although this is not the base case scenario. "We consider intensified attacks on vessels in the Strait of Hormuz and the Red Sea as the most likely factor for this low production and higher price scenario," explained Daan Struyven, head of oil research at Goldman, adding that markets are increasingly pricing in a prolonged conflict in the Middle East.

Long-term Price Normalization Expectations

On the political front, President Donald Trump stated on social media that oil prices "will plummet" when the United States "wins the war with Iran." This forecast currently clashes with market data and HSBC's oil price outlook, which instead points to a slow and partial normalization, not a rapid collapse of prices.

The real crux for those observing global oil supply remains the duration of the conflict. Both HSBC and Goldman converge on one point: the recovery of flows through Hormuz will not be linear, and the market will continue to price in a geopolitical risk premium at least until the second half of 2027.

FAQ

Why HSBC Raised Its Brent Price Forecast for 2026?

HSBC has raised its forecasts for 2026 due to the ongoing and unresolved crisis in the Strait of Hormuz, which continues to cause prolonged disruptions in oil supply.

How Much Has Oil Flow Through the Strait of Hormuz Decreased?

Flows have dropped to about 6 million barrels per day, which is approximately 30% of the volumes prior to the conflict.

What Are the Forecasts for the Recovery of Oil Flow Through the Strait?

HSBC expects a gradual rise to 8 million barrels per day by the end of 2026 and to 9.5 million by mid-2027.

What Could Happen If Diplomatic Negotiations Continue to Fail?

The price of Brent could rise to as high as $120 per barrel before moderating throughout 2027.