Goldman Sachs Group Inc. raised its oil price forecasts for 2026 due to the prolonged disruption of flows through the Strait of Hormuz, which it described as the largest-ever supply shock for global crude markets.
Brent is expected to average $85 a barrel in 2026, up from an earlier forecast of $77, analysts including Daan Struyven said in a note. The full-year outlook for West Texas Intermediate was hiked to $79 from $72, they said.
The revisions rested in part on an assumption that flows through Hormuz would remain at only 5% of normal levels for six weeks, followed by a gradual one-month recovery, they said in the note dated March 22.
Energy markets have been pitched into turmoil by the US-Israeli war with Iran, with hostilities now entering a fourth week with no sign of resolution. President Donald Trump handed Iran a two-day ultimatum to reopen Hormuz — which connects the Persian Gulf to global markets — or see its power plants bombed. Tehran threatened reprisals.
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“The largest oil supply shock ever will likely lead policymakers and markets to recognize the structural risks from the high concentration of production and spare capacity in the Middle East and from the vulnerability of energy infrastructure,” the Goldman analysts wrote.
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On the physical side, while the shock was leading to tightness in Asia, commercial crude stocks in American and European OECD countries were still rising, as global supply exceeded demand before the war, they added.
Crude-production losses in the Middle East will rise from 11 million barrels a day today to a 17-million-barrel-a-day peak, assuming a gradual four-week full recovery after full reopening, the analysts said. That would result in cumulative losses of just over 800 million barrels, they said.
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