Will Brent crude oil price stay above $70 in 2026? Analyst shares outlook

Crude oil trades near 7-month highs as US-Iran tensions sustain a $5-$6 risk premium. Analyst explains how Strait of Hormuz, Opec+ decisions, and current Brent oil prices shape oil market outlook

The high-stake gamble of US-Iran escalation

 

As of late February 2026, crude oil markets are navigating a volatile equilibrium. While prices are trading near seven-month highs - up 8 per cent in the last thirty days and 15 per cent year-to-date - the 'war fever' that gripped the pits last week has begun to cool. Market consensus on a direct US-Iran conflict has recalibrated from a 90 per cent probability to a 50/50 split, yet a stubborn $5–$6 per barrel risk premium remains embedded in global benchmarks.

 

For the Trump administration, the strategic calculus is fraught with domestic and systemic risks. As the US approaches the 2026 mid-term elections, the White House faces an uphill battle; with approval ratings hovering near 36 per cent—trailing significantly behind the 46 per cent rating held by the Obama administration at a similar juncture - high energy costs are a significant political liability.

 

 

The energy chokepoint: A global trade vulnerability

 

The primary deterrent to military escalation is the fragility of the Strait of Hormuz. This narrow corridor facilitates the transit of over 15 million barrels per day (mb/d, EIA 2024 report) -- roughly 15 per cent of global petroleum liquids and 20 per cent of global LNG trade. Any sustained disruption would not merely spike prices; it would likely drive crude toward fresh all-time highs, threatening the 25 per cent of global output sourced from the region.

 

The risk of a 'wider war' is not theoretical. Iran's 'Forward Defence' strategy utilises regional proxies -- including Hezbollah, the Houthis, and Iraqi militias -- to expand the theatre of operations. A strike on Iranian soil could trigger a symmetrical response across multiple geographies, paralyzing maritime logistics and driving insurance premiums for tankers to prohibitive levels.

 

The human and regional cost of instability

 

Beyond the markets, the prospect of regime collapse in a nation of 90 million people presents a catastrophic humanitarian and security risk. Analysts fear that internal destabilisation could ignite ethnic conflicts and a massive refugee crisis. For neighbouring Turkey, Pakistan, and Afghanistan, the flourishing of separatist movements along their borders is a non-starter. Furthermore, the European Union remains highly sensitive to potential influxes of Iranian refugees via Turkey, a scenario that would strain an already fragile continental political landscape.

Great power defiance: The Russia-China factor

 

External geopolitical alignment further complicates a military solution. Beijing and Moscow view Iran as a vital node within their sphere of influence. China, in particular, has leveraged sanctions on Russia and Iran to secure discounted energy, reportedly saving hundreds of millions of dollars monthly. More critically, Iran serves as a strategic land bridge for China's trade routes to Europe. Any US-led effort to sever this link would be viewed by Beijing not just as a regime change operation, but as a direct challenge to its 'Belt and Road' geography.

 

Oil price outlook: The search for a 'softer' exit

 

Intelligence assessments suggest that while the White House is signalling a 'limited strike' capability, such an escalation may ultimately prove symbolic rather than transformative. A kinetically restricted operation is unlikely to compel Tehran to renegotiate on US terms. If the Iranian leadership perceives the US administration as being deterred by the Specter of surging energy costs and the resulting domestic political fallout, their incentive for diplomatic concession remains marginal.

 

For market participants, the recent stabilisation in crude prices reflects a cautious optimism for a diplomatic resolution. However, the underlying structural risks remain acute. In the 2026 energy landscape, geography remains destiny, and the margin for geopolitical miscalculation has never been narrower.

 

Investment thesis and oil price prediction

 

We maintain a constructive (bullish) outlook on Crude Oil for the short-to-medium term. Even in the event of a formal US-Iran agreement, we anticipate any subsequent price correction to be sharp but transitory.

 

The rationale for this resilience is two-fold:

 

Opec+ market stewardship: On a six-to-nine-month horizon, we expect Opec+ to remain proactive in defending price floors.

 

The $70 benchmark: Institutional consensus suggests a concerted effort to maintain Brent crude at or above the $70/bbl threshold to support fiscal breakeven across member states.

   

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Disclaimer: This article is by Mohammed Imran, research analyst, Mirae Asset Sharekhan. Views expressed are his own.