Brent price forecast: could oil fall below $85 as Hormuz fears ease?

Brent extended its retreat towards the mid-$80s on Thursday as traders priced in progress towards reopening the Strait of Hormuz.

Brent futures were down 0.5% at $87.43 a barrel in trading, with Qatar’s prime minister due in Iran to revive diplomatic efforts and Tehran continuing talks with Oman over control of the waterway.

Before the war, Hormuz handled oil and gas shipments equal to about one-fifth of global consumption, but now flows are still only around a quarter of pre-war levels.

$86 could decide whether Brent tests much lower levels

The technical setup increasingly favours another test lower if selling continues.

FXEmpire senior analyst Muhammad Umair identifies $86 as the key downside level for Brent. “A break below $86 will push prices toward $76,” he wrote on Thursday.

Umair sees Brent consolidating inside a broad triangle, with $86 acting as the immediate bearish trigger.

A decisive break would take crude through the $85 threshold and potentially expose much lower support. A move above $95 could reopen the path towards $101.

That matters because the latest selloff has not been driven by a sudden collapse in global demand.

Instead, traders are stripping out part of the geopolitical premium that built around disrupted Gulf shipping.

Also read: Why are oil prices falling even as Iran risk remains unresolved?

Hormuz hopes are running ahead of actual oil flows

The strongest argument against a sustained breakdown is that diplomacy and physical supply are moving at very different speeds.

ING strategists Warren Patterson and Ewa Manthey warned that “any agreement... does not mean we will see normalisation in oil flows.”

They said a genuine recovery would probably require Washington to lift its blockade on Iranian ports and ease sanctions.

ING also questioned US estimates suggesting 8 million to 9 million barrels per day are moving through Hormuz, noting ship-tracking estimates closer to 2 million to 6 million.

ANZ senior commodity strategist Daniel Hynes also cautioned that “concerns over shortages in the oil market persist.”

Diesel is particularly tight. US distillate inventories fell 2.2 million barrels last week to 103.4 million barrels, the lowest level ever recorded for this point of the year.

Damage to Middle Eastern refineries and attacks on Russian plants have further restricted supply.

Below $85 is plausible, but staying there is harder

Institutional forecasts show that sub-$85 Brent is hardly an extreme scenario.

HSBC lowered its 2026 Brent forecast to $80 a barrel from $95, assuming Gulf oil exports return to normal by the end of September. A Reuters poll published in July put the 2026 average forecast at $85.22.

Those numbers make an $85 test increasingly plausible if diplomacy continues improving.

But the same Reuters survey warned that full normalisation could take months, while analysts still expected significant Middle East disruptions.

That distinction is critical.

The market can remove geopolitical risk faster than tankers, refineries and export infrastructure can restore lost supply.

Brent could therefore fall below $85 simply because traders anticipate a better future before the barrels arrive.

A sustained move substantially lower would demand more evidence: higher Hormuz traffic, easing sanctions, recovering product inventories and fewer refinery disruptions.