Skip to content
You can now search across every topic, entity and event.What's new
European Oil Markets
23JUL

Brent at $73: oil forecast of $150 fails

1 min read
19:27UTC

Brent crude stood at approximately $73 per barrel immediately before the 28 February 2026 strikes, with analysts forecasting a rise to $80–100 — well below the $150–200 predicted in earlier modelling — as markets priced partial, reversible Hormuz disruption rather than a formal blockade.

EconomicDeveloping
Key takeaway

Markets priced an $80–100 oil range on 28 February because they assessed Hormuz disruption as partial and reversible — the $150–200 scenario remains a live tail risk conditional on Iranian naval interdiction or prolonged conflict.

The pre-strike $150–200 oil price forecast rested on two assumptions: that Iran would execute a formal Hormuz blockade using mining and naval interdiction, and that the conflict would persist long enough for physical supply to be severely constrained. Neither condition materialised on 28 February. Iran's response comprised ballistic missile strikes, not naval interdiction; tanker avoidance is voluntary and reversible; and Saudi Arabia retains spare production capacity to partially offset any Gulf supply disruption.

A rise from $73 to $80 represents a 10% increase. At $100, the increase is 37% — still inflationary but below the recession-triggering threshold implied by $150–200 modelling. At $100, European economies already managing the energy cost legacy of the Russia-Ukraine war face additional pressure, as do emerging markets with dollar-denominated energy import bills. The Bloomberg tanker-avoidance reporting and Euronews analyst consensus both point to the $80–100 range as the February 28 baseline estimate.

The $150–200 scenario remains a live tail risk rather than a falsified prediction. It materialises if the conflict extends to include Iranian naval action in Hormuz, prolonged tanker avoidance beyond two to three weeks, or destruction of Saudi or UAE production infrastructure. Markets are pricing a shorter and more contained conflict than the worst-case scenario assumed — not ruling out further escalation.

What could happen next?
  • Meaning

  • Meaning

First Reported In

Update #2 · Five cities struck on opening night

Lloyd's List· 28 Feb 2026
Read original
Causes and effects
This Event
Brent at $73: oil forecast of $150 fails
The more modest oil price forecast relative to pre-strike predictions suggests markets assessed Iranian oil infrastructure damage and Hormuz risk as manageable in the short term.
Different Perspectives
US money managers (CFTC-tracked)
US money managers (CFTC-tracked)
US money managers had trimmed WTI net long positioning into July's rally, doubting the Hormuz premium would hold without freight or war-risk confirmation, and the crude stock build reported for the week to 17 July gives that scepticism a fundamentals basis. The 25 July CFTC data will show whether Brent's move above $100 changed their calculus.
Asian distillate buyers (Singapore)
Asian distillate buyers (Singapore)
Singapore's distillate holders kept retaining middle-distillate barrels as the East-West arbitrage window narrowed further this week, a pattern that sharpened as Fujairah light distillates hit a record low. Cargoes are being held rather than released west into the tightening Mediterranean market.
Bulgaria
Bulgaria
Bulgaria secured the removal of Lukoil founder Vagit Alekperov and Patriarch Kirill from the 21st package, with President Rumen Radev calling a personal listing 'shooting ourselves in the foot'. Sofia is protecting its position in Lukoil's EUR 3bn compensation claim over the 2023 Neftohim Burgas nationalisation.
Russia
Russia
Russia loses the roughly $14 a barrel of legal headroom the price-cap formula would have released toward $58, even as Urals continues trading below Moscow's $59 budget floor. The shadow-fleet insurance workaround that lets sanctioned crude clear above $44 in practice remains untouched by the freeze itself.
European Union
European Union
The EU adopted its 21st sanctions package on 23 July, freezing the $44 Russia oil cap for 12 months rather than letting the formula drift it toward $58, and listed shadow-fleet support vessels for the first time. The package cleared only after three failed Coreper votes.
Marine war-risk underwriters (Lloyd's-linked syndicates)
Marine war-risk underwriters (Lloyd's-linked syndicates)
War-risk syndicates lifted southern Red Sea hull premiums 150% to about 0.75% of hull value after the 20 July blockade declaration, still a seventh of the roughly 5% Hormuz band. Underwriters reset on realised loss, not declared threat, so the 23 July Encelia and Layla strikes set up the next re-mark.