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HSBC Holds $65 Oil Forecast Amid Iran Strike Risks, Warns of Hormuz Threat

HSBC Global Investment Research has maintained its Brent crude price forecast of $65 per barrel for 2026 despite escalating tensions following air strikes on Iran. The bank warns that oil market risk is highly asymmetric, with the potential closure of the Strait of Hormuz posing the greatest threat to global supply. While spare capacity in the region is significant, it would be inaccessible if the critical shipping chokepoint is blocked. The conflict also threatens to destabilize regional economic sentiment, activity, and capital flows, particularly in the Gulf and Egypt.

Key Points: HSBC Keeps $65 Brent Forecast Despite Iran Strike Escalation

  • Brent forecast held at $65/barrel for 2026
  • Strait of Hormuz closure is primary oil risk
  • USD expected to strengthen near-term
  • Regional conflict tests Gulf economies & capital flows
2 min read

HSBC keeps Brent crude forecast at USD 65/barrel despite Iran strikes

HSBC warns of asymmetric oil risks from Iran strikes, highlighting Strait of Hormuz disruption as key concern while maintaining $65/bbl Brent forecast for 2026.

"Oil market risk is asymmetrical, with Hormuz transit the main concern - HSBC Report"

New Delhi, March 1

HSBC Global Investment Research has kept its Brent price forecast unchanged at USD 65 per barrel for 2026, even as it warned of rising risks following air strikes on Iran.

In a report titled "Strikes on Iran," HSBC noted that President Trump described a "massive ongoing operation" after strikes were launched. "Given uncertainty, we pull together views related to the economic and market risks of such escalation."

HSBC added, "Oil market risk is asymmetrical, with Hormuz transit the main concern; USD likely to have an upper hand in the near-term."

It also cautioned, "We can have no conviction on how the situation in Iran may evolve following air strikes launched on Saturday, with the impact contingent on the duration of any conflict and how it extends to the broader region."

In crude markets, the bank wrote oil market risk is asymmetrical regarding possible Iran scenarios, with Hormuz transit the main concern.

While spare capacity in the Mideast Gulf is significant, it warned that it would not be accessible if Hormuz is closed.

Assessing the larger regional impact, HSBC said, "Wealth and policy experience safeguard economic order but any fresh conflict would test sentiment, activity and capital flows in the Gulf and challenge Egypt's recent external account gains."

In foreign exchange markets, the bank stated the USD is likely to have an upper hand in the near-term. It added, "Geopolitical events can give confusing signals for currencies, not just for the USD."

On Saturday, the United States and Israel carried out joint missile attacks on Iran, with large explosions reported in Tehran and other major cities, signalling a sharp escalation that risks expanding tensions into a broader regional conflict in West Asia.

Meanwhile, Iran has retaliated, targeting Israel and US assets in multiple Gulf states. Multiple explosions have been heard in Iran's capital, Tehran, while blasts have also been reported in several other locations across the country.

Iran's Supreme Leader, Ayatollah Ali Khamenei, was killed in an Israeli airstrike on Tehran.

United Nations Secretary-General Antonio Guterres called for an immediate halt to hostilities and urgent de-escalation in West Asia, urging world leaders to "act responsibly".

- ANI

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Reader Comments

S
Sarah B
The report is right about the USD gaining. For Indian importers and companies with foreign debt, this is a double whammy - costlier oil and a stronger dollar. The RBI will have its work cut out managing the rupee.
A
Arjun K
Geopolitical tensions in West Asia directly impact us. Many of our brothers and sisters work in the Gulf. Their safety and the remittances they send home are crucial. Hope our government is preparing contingency plans and evacuation routes if needed. 🙏
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Priya S
While the economic analysis is important, the human cost is tragic. The UN chief is correct to call for de-escalation. As a major global voice, India should actively push for dialogue and peace. War benefits no one in the long run.
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Vikram M
HSBC's stance shows they expect a contained conflict. But with the Supreme Leader's death, Iran's response could be unpredictable. This is a major escalation, not a minor skirmish. Their 2026 forecast might need revision sooner rather than later.
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Karthik V
Time to fast-track our strategic petroleum reserves and alternative energy sources. We cannot keep our economy hostage to volatility in a region halfway across the world. Solar and wind investments need a bigger push from both government and private sector.

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