Brent Tops $102 As Mideast Conflict Intensifies, HSBC Hikes Oil Forecast

Brent crude futures traded above $102 a barrel Thursday morning after Iran threatened to intensify attacks, renewing concerns over tanker flows through the Hormuz maritime chokepoint. The supply risk extends well beyond crude to mounting shortages of refined products, particularly diesel, as the US diesel crack spread trades around $102 a barrel.

President Trump's indication yesterday that the conflict could continue beyond November's midterm elections suggests limited near-term fuel pump relief for working-class folks, with the US national gasoline average above the politically sensitive $4-a-gallon threshold and diesel at a record high. Trump also announced overnight a proposal for a $5,000 "Trump dividend" check for every American adult if Republicans retain control of both chambers of Congress.

Following Goldman, HSBC raised its 2026 average Brent crude forecast to $90 a barrel from $80, citing continued disruptions to shipping through the critical Gulf waterway that are expected to keep global oil balances tighter for longer.

With Hormuz flows running at roughly 30% of pre-conflict levels, HSBC analysts see the market adjusting to a prolonged period of depressed tanker transit through the chokepoint. That outlook suggests sustained supply constraints through year-end.

"The key indicator to watch is whether this will put an end to the heavy shuttling of oil through the Strait of Hormuz," said Arne Lohmann Rasmussen, chief analyst at Global Risk Management in Copenhagen. "It may not come to a complete halt, but combined with the more aggressive Houthis in the Red Sea and higher Chinese crude oil imports, the global oil market balance appears to be deteriorating again."

Earlier this week, Vitol Group CEO Russell Hardy said about 10 million barrels a day have been crossing the waterway, roughly half of pre-war levels. He added that an exact figure is hard to quantify and that volumes aren't guaranteed daily.

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Goldman commodities strategist Yulia Zhestkova Grigsby sharply revised tanker-flow estimates through the Hormuz chokepoint to between 15 million and 16 million barrels per day, roughly two-thirds of pre-war levels. That's mainly because the market is not counting ships that turn off their automatic identification systems to avoid detection by Iran.

Goldman's Daan Struyven also noted one upside scenario this week that could push Brent to $120 if the conflict persists...

"The fundamental picture for products remains bullish with global inventories and reserves deteriorating," said Darrell Fletcher, managing director for commodities at Bannockburn Capital Markets. Before 'Operation Epic Furry', about a fifth of the world's oil and liquefied natural gas passed through Hormuz to global customers, mainly in Asia. The ongoing disruptions have sent NatGas prices in Europe above 81 euros on Thursday. 

Beyond energy, a broad-based commodity rally has pushed agricultural products and metals higher, sending the Bloomberg Commodity Index to levels last seen in 2012. HSBC analysts spot a commodities cycle developing into a "super squeeze," which suggests the move could be sustained.