Goldman Sachs Projects Brent Could Reach $120 Amid Hormuz Disruptions

Goldman Sachs has indicated that Brent crude oil prices could approach $120 per barrel by the fourth quarter of 2026 if disruptions in the Strait of Hormuz continue. The bank's analysis highlights significant vulnerabilities in oil supply chains amid escalating geopolitical tensions in the Middle East. Currently, oil flows from the Persian Gulf have dropped below 45% of pre-war levels, which has contributed to rising prices.

The bank's base case scenario projects Brent at $80 per barrel in Q4 2026 and $75 per barrel in 2027, contingent on a de-escalation of tensions between the United States and Iran. However, if disruptions persist, Goldman Sachs suggests that Brent could average as high as $100 per barrel throughout 2027.

As of July 19, Brent crude reached $90 per barrel before easing to $88.47 by July 21, driven by hopes for a ceasefire. The disparity between the base case and the upside scenario emphasizes the sensitivity of crude markets to risks associated with Gulf shipping. A sustained disruption in the Strait of Hormuz would significantly tighten physical supply, given its critical role in global oil flows, while low inventories leave little room to absorb potential shocks.

Additionally, factors such as tight diesel markets, ongoing Ukrainian strikes on Russian refineries, and increased risks of natural gas price spikes further reinforce the potential for higher oil prices. The market remains on edge, with traders likely to price in a geopolitical premium as long as ceasefire negotiations remain unresolved. Conversely, any confirmed de-escalation could lead to a rapid unwinding of recent price gains toward Goldman's $80 base case.