Brent crude broke above $100 a barrel on Wednesday for the first time in six weeks as fighting between U.S. and Iranian forces escalated. HSBC responded by raising its 2026 and 2027 Brent forecasts and said prices could reach $120 a barrel if the Strait of Hormuz stays disrupted.
Oil prices pushed through $100 a barrel on Wednesday, the first time in six weeks, as an escalation in fighting by U.S. and Iranian forces deepened concerns over regional supply. Brent has risen by a quarter since early last month as hopes fade for a permanent end to the six-month-old U.S.-Iran conflict, and the rally accelerated this week after Iran-backed Houthi attacks on Saudi energy facilities set oil installations ablaze.
The benchmark still trades below the $126 a barrel peak it struck earlier in the war. But the return above triple digits pressures a market with little room for error.
HSBC lifts oil forecasts as Hormuz stays disrupted
HSBC analysts, including senior global oil and gas analyst Kim Fustier, raised their 2026 Brent forecast to $90 a barrel from $80, and their 2027 forecast to $85 a barrel from $65. The bank also lifted its longer-term assumption to $75 a barrel from 2028 onward.
The revision follows the collapse of the U.S.-Iran memorandum of understanding in July, after which flows through the Strait of Hormuz appear to have settled around 30% of pre-conflict levels. HSBC expects that traffic to recover only gradually, rising to eight million barrels a day by year-end and 9.5 million barrels a day by mid-2027 — still far below the 19-20 million barrels a day that moved through the strait before the conflict.
The supply cushion keeps thinning
Six months of reduced Middle East exports have drained inventories among major consumers. The U.S. Strategic Petroleum Reserve now holds 289.7 million barrels, its lowest level since 1982. About 10 million barrels a day of exports, roughly 10% of world oil demand, remain missing because of the Iran war, according to estimates from shipping tracker Vortexa.
HSBC sketches two paths from here
Beyond its base case, HSBC outlined two alternative scenarios. If diplomacy fails and Hormuz flows stay near current levels, the analysts noted Brent could rise to circa $120 a barrel as inventories draw toward operational lows. If a durable ceasefire is reached in Q4 2026, Gulf exports could return near pre-conflict levels and Brent could fall to the $70s per barrel by Q1 2028.
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