HSBC has sharply raised its Brent crude price forecast for 2026, lifting its outlook from $80 to $90 per barrel as the crisis in the Strait of Hormuz drags on with no resolution in sight. The bank’s senior oil analyst, Kim Fustier, said global oil markets are unlikely to find balance again until the middle of 2027, a timeline that points to months of tight supply and elevated prices ahead.
Key takeaways
- HSBC raised its 2026 Brent crude forecast from $80 to $90 per barrel and its 2027 outlook from $65 to $85 per barrel.
- Oil flows through the Strait of Hormuz have dropped to about 6 million barrels per day, roughly 30% of pre-conflict levels.
- A US-Iran memorandum meant to stabilize transit through the strait collapsed in July 2026.
- According to HSBC’s projections, flows are set to climb gradually, reaching 8 million bpd by the close of 2026 before hitting 9.5 million bpd by mid-2027.
- Brent could spike to $120 per barrel if diplomatic efforts keep failing, before easing sometime in 2027.
HSBC Revises Brent Crude Price Forecast Amid Strait of Hormuz Crisis
HSBC’s revision marks one of the clearest signals yet that major banks now view the Hormuz disruption as a lasting feature of the oil market rather than a passing shock. The bank’s updated Brent crude price forecast reflects a market where supply constraints are expected to persist well into next year, not just through the current quarter.
2026 and 2027 Price Outlook Increases
The 2026 forecast climbed from $80 to $90 per barrel, but the more striking move came further out. HSBC also raised its 2027 Brent outlook to $85 per barrel, up sharply from a prior $65 estimate. That’s a $20 jump for a year in which, in calmer conditions, analysts might have expected prices to have already normalized. Looking further ahead, HSBC’s assumption for 2028 and beyond sits at $75 per barrel, suggesting the bank sees some cooling off eventually, but not a full return to the sub-$70 environment that prevailed before the crisis began.
Current Elevated Brent Prices Reflect Structural Supply Stress
Brent crude prices have climbed past $100 per barrel lately amid intensifying shipping attacks in the region, yet HSBC’s updated figures—though lower than current spot prices—reflect the bank’s outlook for where prices will land once the initial panic subsides. That distinction matters: a forecast below the current trading price isn’t a bet on relief so much as a signal that HSBC views today’s premium as partly driven by short-term volatility on top of a genuinely tighter underlying supply picture.
Impact of Strait of Hormuz Crisis on Global Oil Supply
The Strait of Hormuz oil crisis is the reason behind HSBC’s entire recalibration. This narrow waterway between Iran and Oman normally carries roughly a fifth of the world’s daily oil consumption, and its disruption has rewritten supply assumptions across the industry.
Supply Disruption and Diplomatic Setbacks
Oil flows through the strait have stabilized at around 6 million barrels per day, about 30% of pre-conflict levels, according to HSBC’s analysis. That collapse followed a failed diplomatic push: a US-Iran memorandum of understanding designed to stabilize transit through the strait fell apart in July 2026, removing the market’s main hope for a quick fix. Fustier’s note comes in the direct aftermath of that failure, and it explains why HSBC is no longer treating the disruption as temporary.
Why it matters: a fifth of global oil consumption depends on a waterway that is currently operating at less than a third of its normal throughput. Any further deterioration in the diplomatic relationship between Washington and Tehran could keep that bottleneck in place for far longer than markets initially priced in.
Projected Oil Flow Recovery Timeline
HSBC does still see a path back toward normal, just a slow one. By mid-2027, the bank projects flows will climb to 9.5 million bpd, following a gradual rise to 8 million bpd by the end of 2026. Even under that relatively optimistic trajectory, transit volumes would remain well below historical norms for more than a year, which is exactly why the bank pushed its 2027 forecast up so aggressively.
Potential Market Scenarios and Price Volatility Risks
HSBC’s global oil supply disruption scenario isn’t the only possible outcome, and the bank has laid out what happens if diplomacy keeps failing instead of stabilizing.
Price Spike Risks if Diplomatic Failures Persist
In a stalemate scenario, where negotiations keep collapsing and transit volumes stay depressed, Fustier’s analysis points to Brent surging as high as $120 per barrel before moderating sometime in 2027. That figure underscores how sensitive this market remains to political developments in the Gulf: a single failed round of talks, as seen in July 2026, was enough to force a $10 upward revision in the 2026 forecast alone.
Longer-Term Price Normalization Expectations
Beyond the immediate volatility, HSBC’s broader HSBC oil price outlook assumes the market eventually settles into a new, somewhat higher normal. The bank’s 2028-and-beyond assumption of $75 per barrel implies that even a resolved Hormuz crisis would leave a lasting mark on pricing, since rebuilding shipping confidence and restoring full transit volumes tends to take longer than the initial disruption itself. Until flows return closer to their pre-conflict baseline, oil markets are unlikely to rebalance, and HSBC’s own timeline for that puts the turning point around the middle of 2027.
FAQ
Why did HSBC raise its Brent crude price forecast for 2026?
HSBC raised its 2026 Brent crude price forecast because the crisis in the Strait of Hormuz remains unresolved, causing prolonged disruptions to global oil supply.
How much has oil flow through the Strait of Hormuz dropped?
Oil flows through the strait have dropped to around 6 million barrels per day, about 30% of the volume seen before the conflict began.
What is the outlook for oil flow recovery through the Strait of Hormuz?
HSBC expects oil flows to gradually recover to 8 million barrels per day by the end of 2026 and 9.5 million barrels per day by mid-2027.
What could happen if diplomatic efforts to stabilize oil transit continue to fail?
If diplomatic efforts keep failing, HSBC’s analysis suggests Brent crude prices could spike to $120 per barrel before moderating sometime in 2027.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
