HSBC Raises 2027 Brent Forecast to $85 as Houthis Strike Saudi Aramco Facilities, Opening a Second Oil Chokepoint

Since Brent crude broke above $100 a barrel this week on the widening U.S.-Iran conflict, HSBC has put a number on how long it thinks the pain lasts: into the middle of 2027.

In a note sent to clients this week and reported by Rigzone, HSBC's oil and gas team, led by senior analyst Kim Fustier, raised its 2026 Brent forecast from $80 to $90 a barrel. The bank raised its 2027 forecast even more sharply, from $65 to $85. HSBC's long-term assumption for 2028 and beyond now sits at $75, up from a prior estimate that Cryptonomist reported was well below current levels.

"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," HSBC's analysts wrote, according to Rigzone.

Why Hormuz still isn't fixed

HSBC's reasoning traces back to July 2026, when a U.S.-Iran memorandum of understanding meant to stabilize transit through the Strait of Hormuz collapsed. Since then, the bank says flows through the strait have settled around 30% of pre-conflict levels, or roughly 6 million barrels a day, down from 19-20 million before the war.

HSBC expects that number to climb only gradually, to 8 million barrels a day by year-end and 9.5 million by mid-2027, still far short of normal. The bank's base case assumes a "fragile" U.S.-Iran understanding eventually holds but remains prone to repeated breakdowns.

Separately, the U.S. Energy Information Administration told Fox News that oil and petroleum liquids moving through Hormuz averaged just 4.9 million barrels a day in the second quarter of 2026, down from 21.6 million barrels a day before the conflict. That figure and HSBC's more recent 6 million-barrel estimate cover different windows of time, but both point the same direction: the strait is operating at a fraction of its former capacity. Saudi Arabia has been rerouting crude through the Bab el-Mandeb instead, where EIA data cited by Fox News shows traffic averaging 8.1 million barrels a day in the same quarter.

A second chokepoint gets hit

That rerouting strategy took a direct hit this week. Iran-backed Houthi rebels fired what their military spokesman, Yahya Saree, described as "dozens of ballistic missiles and drones" at Saudi Aramco facilities, according to Xinhua as reported by Fox News. The strikes hit Jazan, Najran, Abha and Khamis Mushait, wounding 73 people and sparking fires that forced some operations offline, Saudi officials said. The Jazan site includes a refinery capable of processing roughly 400,000 barrels of crude a day.

The Houthis said the attack was retaliation for Saudi airstrikes in Yemen and threatened "stronger and wider strikes" if Riyadh continues its campaign, Fox News reported. Aramco produces about 10 million barrels of oil a day and supplies roughly 10% of global demand, meaning any sustained disruption there lands on a market already stretched thin by Hormuz.

Brent traded near $99 a barrel Tuesday when the Aramco strikes hit, according to Fox News, before climbing further. Breitbart reported Brent crossed $101 on Wednesday, its highest level since May, with WTI near $96.40. A year earlier, Brent was trading around $66.

The case this is overpriced

HSBC's own $90 forecast for 2026 sits below where Brent is actually trading right now. Cryptonomist noted this gap explicitly, framing it as evidence that HSBC views today's price as partly inflated by short-term panic on top of a genuinely tighter supply picture, not proof that $100-plus oil is the new baseline. HSBC's team also points to bypass infrastructure, existing Saudi and UAE pipelines plus projects under construction, that it expects to lift total Gulf export capacity to roughly 16.5 million barrels a day by mid-2027 even if the strait itself stays impaired.

That's the bank's calculated de-escalation path. The Houthi attack on Aramco complicates it, because bypass capacity depends on Saudi infrastructure staying intact.

Feeding into the Fed

The oil story is landing inside a broader commodity spike. GoldSilver reported the Bloomberg Commodity Index is trading near its highest level in more than a decade, and copper hit an all-time high of $14,779 a ton on the London Metal Exchange this week even as smelter processing fees fell to zero, a sign of a supply squeeze rather than demand froth. The U.S. Producer Price Index was released Thursday, and the Federal Reserve's next policy meeting is coming up, according to GoldSilver.

Whether the Fed treats a war-driven oil and commodity spike as the kind of inflation it should fight with rate policy, or as a supply shock outside its control, is an open question the central bank has not yet answered publicly. HSBC's own base case assumes the Hormuz-Bab el-Mandeb standoff, and the price pressure it generates, does not meaningfully ease before mid-2027.