Goldman Sachs has signaled that the recent disruption to crude flows tied to the Iran conflict could keep oil prices elevated for longer than markets currently expect, with risks tilted toward the upside if interruption persists beyond the near term.
In its assessment, the bank expects oil prices to climb in the short term while shipments through the Strait of Hormuz are restricted. Goldman Sachs warned that if market attention shifts to the risk of prolonged disruption, Brent crude could move above its 2008 record.
The bank also noted the potential for the Brent-WTI spread to widen if concern rises about limitations on U.S. exports. Such a divergence, Goldman said, would reflect differing supply and logistical pressures facing the global benchmark and the U.S. contract.
Looking beyond the immediate shock, Goldman Sachs pointed to structural factors that can sustain higher prices. Historical episodes of supply disruption, the bank said, often leave production depressed for years because of infrastructure damage and underinvestment in affected regions. The scale of the risk is substantial: Iran and other Gulf producers represented roughly 30% of global crude output in 2025, according to the bank’s note.
Goldman Sachs flagged another channel that could add to demand-side pressure - an increase in strategic stockpiling. Countries rebuilding reserves after the current interruption or raising their long-term targets may shore up procurement, tightening the market further.
OPEC could provide relief once flows through chokepoints normalize by deploying spare capacity, Goldman suggested, which would help stabilize supply. Offsetting that, the bank noted that persistently elevated prices would tend to restrain demand over time by slowing economic growth and accelerating a mix of efficiency improvements and fuel switching.
For its base case, Goldman Sachs assumes a gradual recovery of flows beginning in April, with Brent easing back into the $70s by the fourth quarter of 2026. Nonetheless, the firm’s scenario work leaves open a higher-for-longer outcome: in situations where disruption is extended and supply damage proves lasting, oil prices could remain above $100 for a prolonged period.
Market moves on Thursday reflected these worries. Oil prices retreated from session highs but finished notably higher after Iran struck key energy infrastructure sites in the Middle East, exacerbating concerns about crude availability. Traders were also parsing central bank remarks from the Federal Reserve, the European Central Bank and the Bank of England, each indicating a wait-and-watch posture as the conflict evolves.
Brent futures initially surged as much as 10.9% to $119.11 a barrel on Thursday before trimming gains; the contract was last reported up 2.3% at $109.79 a barrel at 12:57 ET (16:57 GMT), the highest level since late July 2022.
Bottom line - Goldman Sachs sees a meaningful risk that oil will remain elevated for an extended period if supply disruptions tied to the Iran conflict persist and cause lasting production damage. While OPEC spare capacity and an eventual recovery in flows could temper prices under the bank’s base case, scenario analysis leaves open the possibility of prolonged $100-plus crude.