March 12 - Goldman Sachs raised its price outlook for fourth-quarter 2026 Brent and WTI crude to $71 and $67 per barrel, up from prior forecasts of $66 and $62. The revision reflects the bank's assessment of a longer-than-expected interruption to oil movements through the Strait of Hormuz amid the U.S.-Israeli war on Iran.
Brent and WTI have both seen sharp rallies since the conflict began on February 28, with Brent up more than 36% and WTI higher by about 39%. Both benchmarks briefly climbed above $119 on Monday, reaching their highest levels since mid-2022. The fighting has effectively shut the Strait of Hormuz, leaving tankers stranded for more than a week and prompting some producers to halt output as storage approaches capacity.
In a note published on Thursday, Goldman analysts said they now assume a longer, deeper interruption to Strait of Hormuz oil flows. The bank's updated scenario calls for 21 days of severely reduced flows at 10% of normal volumes, followed by a 30-day gradual recovery. That replaces the firm's earlier assumption of a 10-day disruption. Goldman also warned that daily oil prices would likely surpass the 2008 peak if SoH flows remain depressed through March.
Goldman updated its models to reflect a larger policy response intended to limit the hit to commercial inventories. The bank incorporated 254 million barrels of actual global special petroleum reserve (SPR) releases and 31mb of draws in Russian crude, estimating that these actions would cut the impact on global commercial oil stocks by nearly 50%.
The International Energy Agency agreed to a record coordinated release of 400 million barrels from strategic stockpiles to address the price spike triggered by the war, with the United States providing the majority of that supply.
In Goldman Sachs' base-case projection, Strait of Hormuz flows begin to recover from March 21 onward. Under that scenario, the bank assumes IEA member states will not fully deploy the 400 million barrels available. The bank cites a logistical limit of 3 million barrels per day on draws from Organisation for Economic Co-operation and Development (OECD) SPRs and models a four-week phase-out of releases through early June. Under this path, WTI is expected to moderate to the low $70s by early June.
Goldman's revision balances a longer, deeper near-term disruption to a critical shipping chokepoint against an unprecedented coordinated policy response. The firm’s updated assumptions drive higher end‑of‑year price forecasts while also showing how large reserve releases and Russian crude draws can materially reduce the hit to commercial inventories.
Impacted markets - Global crude benchmarks, oil producers and shipping operations tied to Strait of Hormuz transit; storage and commercial inventory metrics; markets sensitive to SPR draw logistics and timing.