Goldman Sachs Warns of Prolonged $100+ Oil Prices if Hormuz Closure Extends
By Bloomberg News
Global oil markets face a potential multi-year price shock if the critical Strait of Hormuz remains blocked for another month, according to a new analysis from Goldman Sachs. The investment bank warns that Brent crude could average over $100 a barrel through 2026 under such a scenario, underscoring the fragile state of a temporary U.S.-Iran ceasefire.
"The geopolitical situation remains highly fluid," said Daan Struyven, head of oil research at Goldman Sachs, in a client note. The analysis followed the start of a two-week pause in hostilities, which U.S. Vice President JD Vance himself described as "fragile." Struyven added, "Risks to our oil price forecast are decisively skewed to the upside."
The market's focus is locked on the narrow waterway, a chokepoint for roughly a quarter of the world's seaborne oil trade. It has been largely impassable since February, when a U.S. and Israeli strike on Iran ignited open conflict. While both nations agreed to a temporary truce contingent on reopening the strait, the specific terms and timeline remain unclear.
Goldman's base case assumes a resumption of traffic this weekend, with Persian Gulf exports gradually recovering to pre-war levels over one month. This would see Brent averaging $82 in Q3 and $80 in Q4.
However, the bank's adverse scenario—where reopening is "postponed" for an additional month—projects Brent averaging above $100 in the second half of this year. A more severe outcome, involving a longer closure and loss of regional production, paints a grimmer picture: prices could spike to $120 in Q3 and $115 in Q4.
The political rhetoric continues to fuel uncertainty. U.S. President Donald Trump stated on social media that safe passage through the strait was "agreed, a long time ago," threatening a resumption of military action if Iran does not fully comply. Meanwhile, Iran's Ports and Maritime Organization, via state-run Nour News, announced two revised "designated safe routes" for vessels centering around Larak Island, near Bandar Abbas.
The strait, bordered by Iran to the north, is the sole maritime link between the Persian Gulf's vast oil fields and international markets. Its closure has already whipsawed prices: Brent futures recently traded just below $98, after plunging 13% on the ceasefire news. During the height of the crisis, they had soared past $119.
— With assistance from Bloomberg's energy and geopolitics desks.
Market Voices
Liam Chen, Portfolio Manager, Horizon Capital: "Goldman's analysis is a sobering reminder that the geopolitical risk premium is now a semi-permanent fixture. The market is pricing in hope, not certainty. Supply chain contingency plans are being stress-tested like never before."
Sarah El-Masri, Senior Analyst, Global Energy Institute: "The focus on the strait is warranted, but we're overlooking the secondary effects. Prolonged high prices will accelerate demand destruction in emerging economies and force a faster, messier transition away from oil, with severe economic knock-on effects."
Mark Russo, Independent Commodity Trader: "This is a manufactured crisis. The volatility is a goldmine for speculators and a tax on everyone else. The so-called 'safe routes' are a joke—it's a band-aid on a gunshot wound. The administration's mixed signals are only making it worse."
Dr. Anya Petrova, Geopolitical Risk Consultant: "The announcement of specific maritime routes, even by Iranian authorities, is a small but significant de-escalatory signal. It creates a framework for verification and reduces the chance of accidental escalation, which is the immediate danger."