Goldman Sachs has updated its outlook for crude prices, lifting near- and medium-term forecasts in response to what it describes as material interruptions to Middle Eastern supply and projections for sharp declines in commercial inventories.
Brent crude has surged this year, rising about 34% year-to-date to roughly $82 a barrel, a move Goldman links to a marked reduction in oil transiting the Strait of Hormuz, damage to energy infrastructure and storage bottlenecks that compelled Iraq to cut output by nearly 1.5 million barrels per day.
In its new set of projections, Goldman now expects Brent to trade in the mid-$80s during March as market participants weigh mixed signals: flows through the strait could slowly resume, yet fresh indications of production shut-ins and supply losses continue to surface.
The bank raised its second-quarter 2026 average forecast for Brent by $10 to $76 per barrel, up from a previous $66, while its U.S. benchmark West Texas Intermediate forecast was increased by $9 to $71 from $62.
Goldman said those revisions rest on two core assumptions. First, strategists model a continued near-term supply disruption. They assume exports via the Strait of Hormuz stay at about 15% of typical levels for roughly five more days, then recover to 70% over the following two weeks and return to full capacity over the subsequent two weeks.
"Under our assumption of substantial March Hormuz disruptions, we estimate about 200mb of Middle Eastern crude production losses and large draws in OECD commercial inventories in March," strategists led by Daan Struyven wrote.
Goldman's team projects inventories will fall by about 76 million barrels month-on-month in March, a sharp revision from their prior assumption of a 10 million barrel build.
Beyond immediate revisions, the bank nudged its longer-dated forecasts higher, but by smaller amounts. It now anticipates Brent averaging $66 in the fourth quarter of 2026, up from $60 previously, and $70 in 2027 compared with $65 earlier. For WTI, Goldman expects averages of $62 in late 2026 and $66 in 2027.
Despite the higher forecasts, Goldman still expects prices to ease from current levels if the risk premium diminishes and inventories are allowed to rebuild after disruptions subside. Its baseline envisions Brent falling from about $82 at present to roughly $66 by the fourth quarter of 2026.
However, the strategists cautioned that risks are notably skewed to the upside. They pointed to the potential for longer-lasting disruptions to exports through the Strait of Hormuz and the possibility of damage to oil production facilities as key drivers that could push prices higher.
In an illustrative scenario, Goldman estimates that if exports through the strait remained depressed for an additional five weeks, Brent could climb to around $100 per barrel as markets adjust to prevent inventories from dropping to critically low levels.
Conversely, the bank identified a quicker normalization of flows through the Strait of Hormuz as the principal downside risk to the oil price outlook.
This update reflects Goldman's attempt to quantify the immediate impact of the supply shock and to map out how different recovery paths for Hormuz exports would translate into inventory draws and price levels. The bank's revised forecasts and scenario work underline the sensitivity of oil markets to disruptions in a key transit route and emphasize how inventory dynamics can rapidly alter price trajectories.