Will Brent crude oil surge to $80 again as fighting resumes in Iran?
On February 28, the United States and Israel launched large-scale joint military strikes against Iran, sharply escalating risks in the Middle East. The market’s first reaction is usually to chase risk premiums, but what truly determines the direction of oil prices is not sentiment, but whether the supply chain has been substantially damaged.
According to Pursuit Trading Desk, Kim Fustier, senior global oil & gas analyst at HSBC, makes a core judgment in recent research: Risks related to Iran are “asymmetric” for the oil market, with upside much greater than downside; the greatest variable is the security of transport through the Strait of Hormuz—if a brief disruption occurs, Brent oil prices could quickly surge to $80/barrel.
But outside all scenarios, HSBC maintains its long-term assumption of Brent at $65/barrel in 2026. The reason is simple: There remains about 2.3 million barrels/day of global excess liquid supply, OPEC+ possesses considerable spare capacity, geopolitical risks may push up prices but are unlikely to change the medium-term supply-demand framework.
The question is, which path will the conflict take? Will oil prices see a “pulse-style surge,” or evolve into a structural revaluation?
The Real Core Risk Is Not Iranian Oilfields, But the Strait of Hormuz
Iran’s current liquid output is about 4.6 million barrels/day, of which crude oil is about 3.3 million barrels/day; exports previously at 1.6–1.8 million barrels/day, almost all going to East Asia. If military action is limited to airstrikes on nuclear facilities or military targets, and does not affect energy infrastructure, Iranian crude supply itself may not immediately decline sharply.
The real leverage is on the transport side.
About 19–20 million barrels of liquids pass through the Strait of Hormuz daily, around 19% of global supply. Of this, about 15 million barrels are crude oil, the rest refined products and LPG. Even if a blockade is hard to maintain in the long term, a brief disruption is enough to trigger a price spike.
Alternative routes are limited. Saudi Arabia’s east-west pipeline total capacity is about 7 million barrels/day, but idle capacity is only 2–4 million barrels; UAE’s pipeline to Fujairah has idle capacity of about 0.4–0.5 million barrels. All alternative capacity together is far from covering the Strait’s transport volume.
This means if Iran chooses to retaliate in the direction of the Strait, oil price reaction will far exceed that of a simple Iranian production cut.
OPEC’s “Spare Capacity” Is Unavailable During a Blockade Scenario
Middle East Gulf OPEC countries currently have about 4.6 million barrels/day of spare capacity: Saudi Arabia 2.1 million barrels, UAE 1.2 million, Iraq 0.48 million, Kuwait 0.36 million, Iran about 0.5 million.
But these capacities rely heavily on exports via the Strait of Hormuz.
If the Strait is blocked, the market’s theoretical “safety cushion” fails physically. Over the past years, global oil markets have depended on Middle Eastern spare capacity; if transport is restricted, the buffer mechanism suddenly breaks down.
This is the logical basis for HSBC’s “asymmetric risk”—the tail risk of supply disruption is much greater than price retracement after a deal is reached.
Different Escalation Paths, Corresponding to Different Oil Price Ranges
Among several scenarios listed by HSBC, price elasticity rises stepwise:
- Limited strike, no retaliation: Oil price jumps $5–10 in the short term, then retreats, similar to the event in June 2025.
- Broader military escalation: Iranian output may drop to 2.8–2.6 million barrels/day, oil price surges $10–15.
- Internal unrest plus conflict: Output falls to 2.2 million barrels/day, supply shock spreads across the Gulf, price increase may exceed $15.
Historic precedents are not rare. The 1979 Iranian Revolution, two Gulf Wars, and the Libyan civil war all led to multi-year losses in production. What truly changes oil price cycles is never airstrikes, but instability in regime and social order.
Currently there are no signs that Iran’s energy infrastructure has suffered systemic damage. If the conflict remains confined to military targets, the market is more likely to replicate the “jump—retreat” price path.
Refined Oil Risks Are Underestimated
The market focuses on crude oil, but about 10% of global diesel and 20% of aviation kerosene rely on transport through the Strait.
Europe and the US are now in the recovery phase after refinery maintenance season, and refined oil supply is already tight. If the transport disruption is prolonged, the jet fuel market may be the first to see regional shortages.
The price signal may first show up in crack spreads, not in Brent itself.
Medium-Term Framework Is Still “Geopolitical Premium Amid Surplus”
HSBC’s latest calculations: In 2026, global liquids supply will still see about 2.3 million barrels/day surplus (previously 2.6 million). Even with geopolitical risk, this structure has not reversed.
OPEC+ will resume its pace of production increase after the March 1 meeting. HSBC expects quota to rise by 137,000 barrels/day in April, and monthly increases to about 280,000 barrels/day from May to July. The group’s main current goal is to regain market share, not to further tighten supply.
With Brent staying above $70/barrel, the probability of OPEC+ proactively cutting production in 2026 is extremely low.
This means that as long as the Strait of Hormuz is not continuously blocked, it is hard for oil prices to deviate too far from the long-term assumption of $65/barrel.
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The above content is from Pursuit Trading Desk.
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