Goldman Sachs has raised the prospect of oil trading above $100 per barrel next week if disruptions in shipments through the Strait of Hormuz are not resolved. The bank described upside risks to its base-case forecast as "rapidly growing further" and said it plans to reassess its outlook if it does not observe signs that flows are returning to normal in the coming days.
In its current base-case scenario, Goldman Sachs forecasts Brent crude in the $80s for March and in the high $70s for the second quarter. Those projections assume a gradual normalization of traffic through the Strait of Hormuz. The bank cautioned, however, that if that assumption proves unfounded and flows remain depressed over a longer period, oil - particularly refined products - could move substantially higher.
"We now also think it’s likely that oil prices, especially for refined products, would exceed the 2008 and 2022 peaks, if Strait of Hormuz flows were to remain depressed throughout March," the bank said, highlighting the potential for prices to reach levels above past cyclical highs if the disruption endures.
Market moves have already reflected the shock to supply. Crude was positioned on Friday for its strongest weekly gain since the extreme volatility of the COVID-19 pandemic in spring of 2020, a rebound the bank tied to halted shipping and suspended energy exports through the strategic waterway. Goldman Sachs currently estimates that average daily flows through the Strait of Hormuz are down 90 percent, a near-complete interruption of typical passage.
Adding to the volatility are sharply escalatory public statements tied to the fighting in the region. A spokesman for Iran’s Revolutionary Guards publicly challenged U.S. President Donald Trump to deploy U.S. naval vessels to escort oil tankers through the Strait of Hormuz. Separately, the president demanded Iran’s "unconditional surrender," a move the article described as a dramatic escalation of his demands a week into the war he launched alongside Israel, and one that could complicate efforts to negotiate a swift end to hostilities.
Other major banks have also signaled substantially higher potential prices if the conflict continues. Barclays said earlier in the day that Brent crude could potentially test $120 a barrel if the Middle East conflict persists for another couple of weeks.
Goldman’s position underscores how acute supply disruptions in a key chokepoint can rapidly shift market expectations. The bank’s readiness to update its forecast within days reflects both the speed at which conditions are evolving and the direct link between Strait of Hormuz traffic and prompt price formation for crude and refined products.
For now, the scale of the disruption and public statements by regional and international actors mean that the near-term oil outlook remains highly sensitive to developments in shipping through the Strait of Hormuz.