Goldman Sachs has increased its oil price projections after revising the assumed magnitude and length of supply disruption through the Strait of Hormuz, cautioning that risks to prices remain skewed to the upside if outages continue.
Analyst Daan Struynen told investors the bank now models 21 days of significantly reduced flows through the strait - at just 10 percent of normal levels - up from an earlier assumption of 10 days. That sharp curtailment is then followed in Goldman Sachs' framework by a 30-day gradual recovery.
Goldman says its tracking of flows points to an "estimated hit to Persian Gulf exports of 16.2mb/d," which the bank describes as the "largest oil supply shock on record." Under the updated framework the bank raises its price outlook: Brent is now seen averaging $71 in the fourth quarter of 2026, up from a prior forecast of $66, while WTI is expected to average $67.
The revised outlook also incorporates what Goldman calls a "larger policy response and a persistent positioning boost" tied to geopolitical risks and investor rotation into hard assets. In the near term, Struynen said that uncertainty over how long disruptions persist means "oil prices are likely to trend higher" until market participants gain confidence that outages will not become prolonged.
He added that markets will likely demand "a large risk premium to generate precautionary demand destruction." That is, prices may need to rise sufficiently to curb demand as a precautionary response to sustained supply constraints.
Goldman estimates coordinated global policy action - including 254 million barrels of strategic petroleum reserve releases and Russian draws - could reduce the hit to inventories by nearly 50 percent.
Nevertheless, the bank stresses that risks remain two-sided. A faster end to U.S. military action would remove the premium that has pushed prices up, while an extended disruption would be far more damaging.
Under an extended 60-day disruption scenario, Goldman models Brent at $93 and WTI at $89. At the time the bank reported these scenarios, Brent was trading above $96 and CWTI was around $91.50 on Thursday.
Contextual note: The bank's updated assumptions and scenario work aim to quantify how different durations of Hormuz disruption would feed through exports, inventories and price formation, while accounting for potential policy interventions and shifts in investor positioning.