Goldman Sachs Warns Brent Crude Could Surge Past $120 if Strait of Hormuz Disruptions Persist
Goldman Sachs Group has warned that Brent crude prices could surge beyond $120 per barrel by the fourth quarter of 2026 if disruptions in the Strait of Hormuz persist. However, the investment bank clarified that this elevated price spike remains a risk case rather than its primary baseline forecast.
Middle East Escalation and Supply Flow Reductions
In a research note dated July 20, 2026, analysts led by Daan Struyven highlighted that escalating conflict in the Middle East has reignited upward momentum in global energy markets.
The bank estimated that oil shipments moving through the Persian Gulf have plummeted to less than 45% of pre-war levels, severely constraining global supply and driving the latest oil price rally.
"The escalation in the Middle East and the fall in estimated Persian Gulf flows to less than 45% of pre-war levels have pushed oil prices higher once again." — Daan Struyven, Goldman Sachs Analyst.
Geopolitical Backdrop and Baseline Outlook
The market friction follows recent military actions where US forces targeted Iranian assets after President Donald Trump vowed that Tehran would "pay a price" following the deaths of three US service members.
Despite the potential upside risks associated with prolonged physical supply bottlenecks, Goldman Sachs' core baseline model assumes an eventual easing of regional geopolitical friction:
ScenarioBrent Crude TargetUnderlying Market Assumption
Baseline Forecast (Q4 2026)$80 / barrelAssumes gradual de-escalation of Middle East tensions.
Baseline Forecast (2027)$75 / barrelAssumes steady normalization of regional supply chains.
Risk Scenario (Q4 2026)> $120 / barrelTriggered if severe Strait of Hormuz disruptions persist.