Goldman Sachs Sees Brent Crude Price Crossing $120 If Hormuz Disruptions Continue

Brent crude price could rise beyond $120 per barrel by the fourth quarter if disruptions to oil flows through the Strait of Hormuz continue, Goldman Sachs said in a report dated July 20. The investment bank, however, maintained that its central outlook still assumes a gradual easing of tensions in the Middle East, with Brent crude price averaging $80 per barrel in the fourth quarter of 2026 and $75 per barrel in 2027.

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The warning comes as global energy markets remain focused on supply risks after renewed military action involving the U.S. and Iran, along with threats to shipping routes in the Gulf region.

Goldman Sachs said reduced crude shipments through the Persian Gulf have contributed to the recent rise in oil prices. According to the report, estimated oil flows through the region have dropped to below 45% of pre-conflict levels, increasing concerns over global supply.

Shipping Risks Remain The Key Concern

The investment bank said its current projections depend on a de-escalation of geopolitical tensions. However, it added that risks to the forecast remain skewed to the upside because of continued uncertainty around shipping through the Strait of Hormuz and possible disruptions in the Red Sea.

The Strait of Hormuz is one of the world’s busiest energy trade routes, carrying a significant share of globally traded crude oil. Any prolonged disruption in the passage can tighten supplies and increase volatility in the crude oil price.

Brent crude price recently climbed above $91 per barrel after renewed hostilities between the U.S. and Iran and fresh threats from Iran-backed Houthi rebels to block Saudi Arabian shipments. Although prices later eased, the market continues to react to developments in the region.

Market Conditions Could Limit Further Gains

Goldman Sachs noted that several factors could moderate the pace of any further increase in crude oil price. The bank pointed to weaker crude imports by China and greater demand elasticity as potential offsets to supply-related disruptions.

At the same time, lower global oil inventories recorded during the second quarter have left the market more vulnerable to unexpected supply shocks, making geopolitical developments a key factor for energy prices in the coming months.

Diesel Market Faces Additional Pressure

Apart from crude oil price, Goldman Sachs highlighted tight conditions in diesel markets. The report said diesel supplies were already under pressure before the latest conflict, while continued attacks on Russian refining infrastructure, hurricane risks, extreme summer temperatures and delayed refinery maintenance could add further strain.

As of the latest trading session, Brent crude price was around $88.65 per barrel, below its recent peak but still significantly higher than levels seen before the latest escalation. Market participants are expected to continue tracking developments in the Middle East, as any sustained disruption to energy supply routes could influence global oil prices and broader financial markets.