Goldman Sachs has issued a warning that Brent crude oil prices could reach as high as $120 per barrel if attacks on shipping in the Middle East, particularly around the Strait of Hormuz, intensify and broaden. This upside scenario is driven by concerns over ongoing geopolitical tensions, including renewed exchanges between the US and Iran, which have already pushed Brent crude above $97 per barrel. The bank noted that the risk of shipping disruptions escalating is significant.
The investment bank also provided updated price forecasts, raising its Brent and WTI predictions by $5. For December, Goldman now expects Brent to be at $85 a barrel and WTI at $80. Looking further ahead to 2027, their forecasts are $80 for Brent and $75 for WTI. Conversely, Goldman outlined a downside scenario where oil could fall to $80 a barrel if exports from the region normalize.
Daan Struyven, co-head of global commodities research at Goldman Sachs, highlighted during a Bloomberg TV interview that while there's significant upside potential for crude oil, investors seeking to hedge geopolitical risks might consider long positions in natural gas and refined-oil products. He explained that supply shocks are currently larger in these markets than in crude itself. Diesel prices, for example, have more than doubled this year, and disruptions in refining and specific crude grades have tightened fuel supplies. Goldman also noted that China might act as a stabilizing force in crude by trimming imports when prices rise, but not for natural gas or refined products.
Recent events have seen a significant reduction in vessel traffic through the Strait of Hormuz, a critical waterway through which roughly one-fifth of the world's oil supply historically passes. Data from Kpler indicated that commodity shipping through the strait averaged only about 10 vessels per day over the past 10 days, the lowest level since May, following US and Iranian strikes on tankers. The US Energy Information Administration reported that by Q2 2026, oil flows through Hormuz had fallen to 4.9 million barrels per day from 15.9 million barrels per day in Q4 2025.
Other analysts have also weighed in, with a Reuters survey from late July showing a consensus average Brent forecast of $85.22 a barrel for the year. HSBC had previously estimated that Brent could average as much as $120 a barrel in 2026 if regional flow restrictions persisted for about six months. This wide range of forecasts underscores how highly dependent the oil outlook is on the duration and severity of disruptions in key Middle Eastern transit routes, rather than traditional supply-and-demand balances.
