The war in Iran has reignited, will Brent crude oil hit 80 dollars again?

On February 28, the United States and Israel launched a large-scale joint military strike 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 is materially disrupted.

According to the Chase Wind Trading Desk, Kim Fustier, a senior global oil and gas analyst at HSBC, provided a core judgment in a recent study: the risks related to Iran are "asymmetric" for the oil market, with the upside potential clearly greater than the downside risk; among these, the security of transportation through the Strait of Hormuz is the biggest variable. If there is a brief interruption, Brent oil prices could quickly surge to $80 per barrel.

However, outside of all scenarios, HSBC maintains its long-term assumption of $65 per barrel for Brent in 2026. The reason is simple: there is still a surplus of about 2.3 million barrels per day in global liquid supply, and OPEC+ has considerable idle production capacity. Geopolitical risks may raise prices, but they are unlikely to change the mid-term supply-demand framework.

The question is, which path will the conflict take? Will oil prices experience a "pulse surge," or will they evolve into a structural revaluation?

The Real Core of Risk Lies Not in Iranian Oil Fields, but in the Strait of Hormuz

Iran's current liquid production is about 4.6 million barrels per day, of which approximately 3.3 million barrels per day is crude oil, with exports previously at 1.6 to 1.8 million barrels per day, almost all flowing to East Asia. If military actions are limited to airstrikes on nuclear facilities or military targets, without touching energy infrastructure, Iranian crude oil supply may not immediately decline significantly.

The real leverage lies in transportation.

About 19 million barrels of liquid fuel pass through the Strait of Hormuz daily, accounting for approximately 19% of global supply. Of this, about 15 million barrels are crude oil, with the remainder being refined products and LPG. Even if a blockade is difficult to maintain in the long term, a brief interruption is enough to trigger a sharp price spike.

Alternative routes are limited. Saudi Arabia's east-west pipeline has a total capacity of about 7 million barrels per day, but only 2 to 4 million barrels are idle; the UAE's pipeline to Fujairah has an idle capacity of about 400,000 to 500,000 barrels. The total alternative capacity is far from sufficient to cover the transportation volume through the Strait.

This means that if Iran chooses to retaliate in the direction of the Strait, the price reaction will far exceed the simple reduction in Iranian production itself.

OPEC's "Idle Capacity" Is Not Available in a Blockade Scenario

Currently, OPEC countries in the Middle East Gulf collectively have about 4.6 million barrels per day of idle capacity: Saudi Arabia 2.1 million barrels, UAE 1.2 million barrels, Iraq 480,000 barrels, Kuwait 360,000 barrels, and Iran about 500,000 barrels.

However, this capacity is highly dependent on exports through the Strait of Hormuz.

If the Strait is blocked, the theoretically "safe cushion" in the market will physically fail. The global oil market has become reliant on Middle Eastern idle capacity in recent years, and once transportation is restricted, the buffering mechanism will suddenly malfunction.

This is also the logical basis for HSBC's statement of "asymmetric risk"—the tail risk of supply disruption is far greater than the price drop space after an agreement is reached.

Different Escalation Paths Correspond to Different Oil Price Ranges

In the scenarios listed by HSBC, price elasticity shows a stepwise increase:

• Limited strikes, no retaliation: Oil prices jump $5–10 in the short term, then fall back, similar to the June 2025 incident

• Wider military escalation: Iran's production may drop to the range of 2.8–2.6 million barrels per day, with oil prices surging by 10–15 dollars.

• Internal turmoil combined with conflict: Production may fall to 2.2 million barrels per day, with supply shocks expanding throughout the Gulf, and price increases possibly exceeding 15 dollars.

Historical cases are not uncommon. The 1979 Iranian Revolution, the two Gulf Wars, and the Libyan Civil War all led to years of production losses. What truly changes the oil price cycle has never been airstrikes, but rather instability in regimes and social order.

Currently, there are no signs that Iran's energy infrastructure has been systematically damaged. If the conflict is contained to military targets, the market is more likely to replicate a "spike—retraction" path.

Refined oil risks underestimated

Market focus is on crude oil, but about 10% of global diesel and 20% of aviation fuel rely on Strait transportation.

Europe and the United States are currently in the recovery phase after the refinery maintenance season, and refined oil supply is already tight. If transportation disruptions are prolonged, the aviation fuel market may experience regional shortages first.

Price signals may initially manifest in the crack spread rather than Brent itself.

Mid-term framework remains "geopolitical premium in excess"

HSBC's latest calculations indicate that in 2026, there will still be an excess of about 2.3 million barrels per day in global liquid supply and demand (previously 2.6 million barrels). Even considering geopolitical risks, this structure has not reversed.

OPEC+ will resume its production increase pace after the March 1 meeting. HSBC expects an increase of 137,000 barrels per day in April quotas, with monthly increases rising to about 280,000 barrels per day from May to July. The group's current main goal is to regain market share, rather than further tightening supply.

With Brent maintaining above 70 dollars per barrel, the likelihood of OPEC+ actively cutting production in 2026 is extremely low.

This means that as long as the Strait of Hormuz is not continuously blocked, the oil price center is unlikely to deviate too far from the long-term assumption of 65 dollars per barrel