HSBC raises its oil forecast as the Hormuz backup plan burns

HSBC has raised its oil forecast, predicting Brent crude to average $90 a barrel in 2026, up from $80. This comes as diesel prices have soared to $5.94, with regular gasoline reaching $4.29. HSBC's revised forecasts come amid tight market conditions, with some traders believing the current spike may not become the annual average.

The bank's base case assumes Hormuz liquids flows climb to 9.5 million barrels by year-end and 16.5 million by mid-2027, though recent satellite imagery has shown a potential disruption in Saudi Arabia's East-West oil pipeline. The market's lack of consensus on current Hormuz flow rates, ranging from 6 to 10 million barrels, adds an element of uncertainty to HSBC's calculations.