Oil Price Forecast: Brent Crude Jumps to $72.48 After U.S.-Israel Strikes on Iran — Barclays Targets $80

Oil Price Forecast: Brent Crude Jumps to $72.48 After U.S.-Israel Strikes on Iran — Barclays Targets $80, the Strait of Hormuz Carries 20 Million Barrels a Day, and OPEC+ Meets Sunday With the Power to Reshape the Entire Supply Picture

Saturday, February 28, 2026 | TradingNews.com

Brent crude (BZ=F) settled Friday at $72.48 per barrel, up $1.73 or 2.45% on the session. West Texas Intermediate (CL=F) closed at $67.02, gaining $1.81 or 2.78%. Then the bombs started falling. On Saturday morning, the United States and Israel launched coordinated military strikes against Iranian targets, with explosions confirmed in Tehran. Iran retaliated immediately — missiles hit facilities in the United Arab Emirates, Qatar, Bahrain, and Kuwait, including a U.S. Fifth Fleet service center. Explosions were reported near Kharg Island, the terminal through which the vast majority of Iranian crude exports flow. Markets are closed. Positions are locked. And when Brent and WTI reopen for trading, the gap higher could be the most violent in oil markets since the 2019 Abqaiq drone attack took 5.7 million barrels per day offline in a matter of hours.

The geopolitical risk premium that has been embedded in crude prices for weeks is no longer hypothetical. The scenario that traders have been positioning for — an actual military confrontation between the world's largest oil consumer and one of OPEC's top ten producers — has arrived. Barclays has already flagged Brent at $80 per barrel as a plausible outcome if significant supply goes offline. SEB analysts have outlined scenarios ranging from $55 to $150 per barrel depending on how far the conflict extends. The Strait of Hormuz, through which 20 million barrels per day of crude, condensate, and refined products flow, is now a live theater of military operations. This is the oil market's nightmare scenario playing out in real time.

Friday's Price Action — WTI and Brent Already Rallying Before the First Bomb Fell

Friday's 2.45% gain in Brent and 2.78% surge in WTI occurred before the strikes were launched. The rally was driven by positioning — specifically, the kind of hedging behavior that experienced commodity traders recognize as a war premium being priced in real time. Rebecca Babin, senior equity trader at CIBC Private Wealth, captured the dynamic precisely: whenever markets approach a closed period without a clear diplomatic breakthrough, traders add upside protection through call buying and risk positioning. Nobody wants to be short crude going into a weekend where bombs might fall on Iranian oil infrastructure.

Phil Flynn of the PRICE Futures Group was even more direct: the bid was driven by growing speculation that an attack on Iran's nuclear infrastructure could not be avoided. Classic risk aversion — no one wants to ride out a price spike from the wrong side. Any attack, he warned, would cause a major price spike at minimum in the initial reaction, and the short-covering dynamic would amplify the move.

The year-to-date averages for 2026 tell the story of a market that was already elevated before the crisis: Brent has averaged $70.48 and WTI $65.01. This week alone, Brent traded in a range of $69.16 to $72.61 — a $3.45 band that reflects the headline-to-headline volatility that has defined oil trading throughout February. SEB's analysts noted that prices were rising even before Saturday as the market grew "nervous for what might happen during the weekend." That nervousness has now been validated by the most consequential military operation in the Middle East since the 2003 invasion of Iraq.

The Risk Premium — $4 to $10 Per Barrel, and Now It Has to Reprice Higher

A February survey of 34 economists and analysts pegged the current geopolitical risk premium in crude at between $4 and $10 per barrel. Norbert Rucker, head of economics and next generation research at Julius Baer, characterized oil prices as "bloated with a decent geopolitical risk premium" and expected the Iran tensions to prove temporary — a view that was reasonable before Saturday but is now obsolete.

DBS analyst Suvro Sarkar estimated the war premium more specifically at $8 to $10 per barrel. PVM's Tamas Varga summarized the pre-strike sentiment in two words: "uncertainty prevails." These estimates were calibrated for a scenario of prolonged diplomatic tension, not active military strikes with Iranian retaliation hitting multiple Gulf states simultaneously.

When markets reopen, the risk premium must reprice higher. The question is how much higher. If the strikes are perceived as a limited operation with a defined military objective — similar to Israel's June 2025 "Operation Midnight Hammer" — the premium might add another $3 to $5 per barrel, pushing Brent to $75–$78. If the conflict expands, shipping lanes are threatened, or Iranian exports are physically disrupted, the premium could surge to $15–$20 per barrel, sending Brent above $85 and WTI past $80. The SEB scenario analysis framing $150 as the extreme upside is the "Strait of Hormuz closure" case — a tail risk that moved from theoretical to plausible on Saturday morning.

The Strait of Hormuz — 20% of Global Oil Consumption Flows Through a Channel Iran Has Already Closed for Drills

The Strait of Hormuz is the single most important chokepoint in global energy logistics. According to U.S. Energy Information Administration data, approximately 20 million barrels of crude, condensate, and fuel products passed through the strait daily in 2024 — equivalent to nearly 20% of global liquid oil consumption. The channel is deep enough and wide enough to handle the world's largest crude oil tankers, and virtually no alternative routes exist to move Middle Eastern oil if the strait is blocked.

Iran has not been subtle about the Hormuz threat. Last week — before the strikes — Tehran temporarily closed the strait for live-fire naval drills. It was the second time in recent weeks Iran had conducted military exercises in the waterway, and the first time it had actually shut the channel since the U.S. threatened military action. Iran's Revolutionary Guard has repeatedly stated that any attack on Iranian territory would trigger a Hormuz blockade, cutting off oil flows from Saudi Arabia, Iraq, Kuwait, the UAE, and Qatar simultaneously.

A full blockade remains a low-probability, extreme-consequence scenario. Iran's own exports — approximately 3.1 million barrels per day, down from 6 million before sanctions — also flow through the strait, meaning a closure would damage Iran's own revenue. But in the fog of active military conflict, rational calculations give way to escalation dynamics. The explosions near Kharg Island — Iran's primary export terminal — suggest the conflict is already touching oil infrastructure, even if neither side has declared an intention to target it directly.

Iran's Oil Production — 3.1 Million Barrels Per Day, $10 Per Barrel Cost, and China as the Lifeline

Iran remains a top-ten global oil producer despite four decades of sanctions pressure. Current output stands at approximately 3.1 million barrels per day according to OPEC data — down from roughly 6 million in the 1970s when Iran was the world's third-largest producer behind only the United States and Saudi Arabia. Iranian crude is relatively easy and cheap to extract, with production costs as low as $10 per barrel — comparable only to Saudi Arabia, Iraq, Kuwait, and the UAE, and dramatically below the $40 to $60 per barrel costs in Canada and the United States.

More than 80% of Iran's crude exports are bound for Chinese refineries. Beijing has maintained purchases of Iranian oil through sanctions by routing shipments via intermediaries and using non-dollar payment channels. China's recent strategic stockpiling — adding approximately 1 million barrels per day to reserves — has absorbed a significant portion of the global surplus, according to Cyrus De La Rubia of Hamburg Commercial Bank. If the strikes disrupt Iranian exports or trigger new sanctions enforcement, China would need to source replacement barrels from the spot market, tightening global supply precisely when geopolitical risk is already maximizing demand for physical crude.

Barclays: Brent Could Hit $80 If 1 Million Barrels Per Day Goes Offline

Barclays has modeled a scenario where Brent climbs to approximately $80 per barrel if significant supply — on the order of 1 million barrels per day — goes offline as a result of the Iran conflict. That level would represent a 10.4% premium to Friday's close of $72.48 and would upend the current narrative of oversupply in the second half of 2026.

The bank cautioned that the $80 scenario is a risk case, not a base case. If Iranian shipments remain uninterrupted and the conflict is contained, the war premium could evaporate rapidly, shaving $3 to $5 off prices and returning Brent to the $67–$69 range. The asymmetry is notable: the upside from escalation is $8–$10 per barrel, while the downside from de-escalation is $3–$5. That skew favors being long crude into the uncertainty.

OPEC+ Meets Sunday, March 1 — A 137,000 Barrel Per Day Output Hike Is on the Table

Eight OPEC+ producers are scheduled to meet on Sunday, March 1, to set April production levels. The group has been considering an increase of 137,000 barrels per day for April — a modest hike that would end a three-month pause in production increases and position the cartel for peak summer demand season.

The Iran strikes fundamentally change the calculus of that meeting. OPEC+ now has two competing pressures: the desire to capitalize on higher prices by adding supply, and the risk that adding supply during a geopolitical crisis could be perceived as undermining a member state (Iran) during a military attack. Saudi Arabia's leadership position within the group adds diplomatic complexity — Riyadh must balance its relationship with Washington against solidarity with OPEC members.

Zain Vawda of MarketPulse offered a critical insight: if the geopolitical risk premium remains elevated by Sunday's meeting, OPEC+ may be further emboldened to resume output hikes. Higher prices provide political cover for the Saudis to add barrels without appearing to crash the market. Conversely, if the group signals restraint — holding production steady or implementing smaller increases — the market would interpret that as a tightening signal, adding further upside pressure to Brent and WTI.

2026 Demand Outlook — 0.5 to 1.1 Million Barrels Per Day Growth, Tempered by EVs and Trade Wars

The demand side of the equation remains the counterweight to geopolitical supply risk. Analyst estimates for 2026 oil demand growth range from 0.5 to 1.1 million barrels per day — positive but modest. Surabhi Menon of the Economist Intelligence Unit identified three factors limiting growth: elevated prices themselves (higher costs suppress consumption), an economic slowdown driven by trade uncertainty (tariffs, supply chain restructuring), and accelerating adoption of electric vehicles, which is progressively displacing marginal gasoline demand.

U.S. production is expected to plateau or slightly decline through 2026 — a structural shift from the shale growth narrative that dominated the prior decade. The rig count has been declining, capital discipline remains the mantra among E&P companies, and the most productive Permian acreage is increasingly concentrated among a smaller number of operators who prioritize returns over volume.

The surplus estimates for 2026 range widely — from 0.8 million to 3.5 million barrels per day of oversupply — depending on assumptions about OPEC+ compliance, Iranian export disruption, and Chinese strategic stockpiling rates. De La Rubia warned that any slowdown in China's reserve-building program could exacerbate the glut, returning prices to the lower end of the forecast range. But that analysis was written before bombs were falling on Tehran. The supply glut narrative, which has capped oil prices for months, may be suspended indefinitely if the Iran conflict persists.

The Analyst Survey — Brent at $63.85, WTI at $60.38, Both Revised Higher in February

The February survey of 34 economists and analysts produced a Brent average forecast of $63.85 for full-year 2026 — up from January's $62.02. WTI was forecast at $60.38, up from $58.72. These revisions were driven by the geopolitical risk premium, not by fundamental demand improvement. The survey was conducted before the strikes.

Art Hogan, chief market strategist at B. Riley Wealth, connected the upward revisions directly to Iran: the fear of potential supply disruption is the primary driver of the price increase, and that fear will persist until a peaceful resolution materializes. He noted that if and when diplomacy succeeds, the war premium could dissipate from crude prices — but cautioned that the timeline for diplomatic resolution is now measured in months, not days.

Aaron Hill of FP Markets layered in the OPEC+ dynamic: prices are edging higher on both supply-side discipline from the cartel and elevated Middle East tensions, keeping a firm risk premium embedded in crude. He also flagged the upcoming U.S. inflation data — if readings come in stronger than expected, they could reinforce energy price pressures and create a short-term bid despite underlying concerns about slower demand growth.

The Week Ahead — OPEC+ Sunday, ISM Monday, Fed March 17–18, Jobs Report March 6

Sunday's OPEC+ meeting at 1100 GMT is the first catalyst. The decision on April output — whether to proceed with the 137,000 bpd increase, hold steady, or surprise with a larger hike — will set the tone for crude trading through the first half of March.

Monday brings ISM manufacturing data, which will provide a read on U.S. industrial activity and, by extension, domestic oil demand. The Fed's next meeting on March 17–18 will shape rate expectations — lower rates typically weaken the dollar and support commodity prices. Friday's February non-farm payrolls report (consensus: 60,000 jobs, 4.3% unemployment) will either reinforce the slowing-growth narrative or push back against it.

For oil specifically, the critical watchpoints are: tanker traffic through the Strait of Hormuz (any deviation from normal patterns signals supply risk), Iranian export loading schedules at Kharg Island (any disruption confirms the worst-case scenario), time spreads in the Brent and WTI futures curves (widening backwardation means refiners are willing to pay more for immediate barrels), and U.S. inventory data from the EIA on Wednesday.

The Verdict — Crude Oil: Buy, With Brent Targeting $78–$80 and WTI at $72–$75

Brent crude (BZ=F) at $72.48 and WTI (CL=F) at $67.02 are both a buy.

The asymmetry is overwhelmingly skewed to the upside. On the bull side: active military conflict between the U.S. and Iran, retaliation hitting multiple Gulf states, explosions near Kharg Island, the Strait of Hormuz carrying 20 million barrels per day of flow under threat, a $4–$10 risk premium that needs to reprice higher, Barclays modeling $80 Brent on 1 million bpd disruption, OPEC+ potentially maintaining supply discipline, and 80% of Iranian exports flowing to China where replacement sourcing would tighten the global spot market.

On the bear side: potential de-escalation (which appears less likely after Iran struck four U.S. bases), OPEC+ hiking output at Sunday's meeting, the underlying surplus of 0.8–3.5 million bpd that exists when geopolitics are calm, and demand growth capped at 0.5–1.1 million bpd by EVs and trade uncertainty.

The bear case requires the conflict to end quickly, diplomacy to resume, and markets to look through the weekend's events as a one-time shock. History says otherwise: Israel's June 2025 strikes produced sustained elevated prices until Trump announced a pause. This time the escalation is broader, the retaliation more severe, and the proximity to critical oil infrastructure — Kharg Island, the Hormuz strait — closer than any prior incident.

Near-term target: Brent at $78–$80 and WTI at $72–$75 by mid-March, assuming the conflict remains active and OPEC+ does not flood the market with additional barrels. If the Strait of Hormuz faces any disruption — even a partial closure or insurance-driven rerouting of tanker traffic — the SEB upside scenarios of $100+ come into play.

Downside risk: Brent at $65–$67 if a ceasefire or diplomatic framework emerges within the first week of March and the risk premium deflates. The $63.85 full-year survey average becomes the gravitational pull once the war premium is removed.

Positioning: buy the Sunday night open via Brent or WTI futures, accept the gap, and manage risk with stops below $69 on Brent and $64 on WTI. The trade is not catching a bottom — the trade is riding a geopolitical premium that has just been massively reinforced by actual combat operations. The market was already long headed into the weekend. The market will be longer coming out of it. The trend, the headlines, and the physical risk to 20% of global oil supply all point the same direction: higher.