HSBC raises Brent crude price forecast to $90/bbl for 2026

HSBC on Tuesday raised its Brent crude price forecasts for this year and next, citing a prolonged disruption to shipping flows through the Strait of Hormuz following the collapse of a U.S.-Iran memorandum of understanding.

"We think the market is adjusting to a disrupted 'new normal' in which the strait is neither fully closed nor fully open, but persistently impaired," said Kim Fustier, senior global oil & gas analyst at HSBC in a note.

The bank raised its 2026 Brent forecasts to $90/barrel from $80 previously, including a $95/bbl estimate for the fourth quarter of 2026. It lifted its 2027 forecast to $85/bbl from $65, and raised its longer-term assumption to $75/bbl from 2028 onwards.

Oil prices hit multi-week highs on Tuesday after Iran-backed Houthis attacked Saudi energy facilities and Tehran threatened the United States with "economic warfare".

Brent crude futures earlier rose to $99.46, the highest since July 24, while U.S. West Texas Intermediate crude reached $94.73, its highest since June 8.

The analysts said flows through the critical waterway have stabilized at roughly 30% of pre-conflict levels since the breakdown of the U.S.-Iran understanding in July, with volatility persisting day to day.

"We expect liquids flows through Hormuz to rise from c6mbd currently to 8mbd by year-end and 9.5mbd by mid-2027, still far below the 19-20mbd of pre-conflict transit. This leaves the market tighter for longer than we had previously assumed," they added.

HSBC does not expect the market to return to balance until around mid-2027, implying further inventory drawdowns over the coming quarters.

The bank also raised its refining margin assumptions for 2026-28 and expects product tightness to persist through 2027, even as crude balances gradually improve.