Goldman Sachs Labels Hormuz Disruption Largest-Ever Oil Supply Shock, Dwarfing 1973 Embargo

Commodity strategist Daan Struyven and his Goldman Sachs colleagues published a research note Thursday war-gaming the global oil system under Hormuz closure conditions, arriving at a conclusion with no historical parallel: the current disruption is the largest-ever oil supply shock, exceeding both the 1973 OPEC embargo and the 1990 Gulf War in scale and immediacy.

The mechanics are stark. Persian Gulf exports have fallen to roughly 3% of normal levels, with vessel-count data confirming a 94% drop in Hormuz shipping and a 63% collapse in Middle East oil exports following US and Israeli strikes on Iranian facilities. The net hit to global commercial oil stocks stands at 11.4 million barrels per day, already exceeding Goldman's own 10 mb/d threshold that underpinned its prior $85 Brent forecast. With the strait fully closed, the shortfall reaches approximately 15 mb/d. The 1973 embargo put roughly 7% of world oil supply at risk; this crisis threatens nearly 20%.

The benchmark divergence tells the story of where the system fractures first. WTI sits near $100 per barrel while Dubai crude has surged past $160, a split that reflects the geographic reality: 84% of all crude transiting Hormuz is destined for Asia. Refined products, particularly jet fuel, are cracking before crude markets do. Airlines across Asia are grounding fleets not because of formal rationing but because jet fuel costs have become economically unviable. Japan, South Korea, and Taiwan source 60 to 75% of their crude imports through the strait. Fuel rationing has already been reported in India and Thailand, with gas stations displaying "out of stock" signs across the Philippines. The US faces a 60% fuel oil loss.

Goldman raised its oil forecasts twice in two weeks, described as an extremely rare move. Brent is now expected to average $105 per barrel in March 2026 and $115 in April, retreating to $80 by year-end under a base case of roughly six weeks of total disruption. Full-year 2026 Brent was raised to $85 from $77; WTI to $79 from $72. In a worst-case scenario, Brent could exceed its all-time record of approximately $147 per barrel, set in July 2008. If the blockade persists through June, Goldman and Macquarie warn Brent could realistically test $150 to $200, a range that would likely trigger a global recession. Crude futures are already up roughly 70% year-to-date.

Three signals dominate the next 72 hours. President Trump's April 6 deadline for Iran to reopen the strait is the most immediate tripwire: any credible shipping reopen signal would begin unwinding the $14 to $18 per barrel geopolitical risk premium Goldman expects to persist for months. OPEC spare capacity activation serves as a partial pressure valve, though it cannot replace Hormuz-scale volumes. SPR release policy is the third lever, though Goldman cautions that post-crisis reserve restocking will create additional long-term demand, functioning as a durable price floor long after the acute phase subsides.

The broader macro stakes sharpen the urgency for corporate risk managers and portfolio strategists. Goldman has raised its US recession probability to 30%, citing oil-driven inflation and lower GDP growth. Global stocks are dwindling to a 30 to 40-day supply window. European gas storage sits at just 30% capacity after a harsh winter, with Dutch TTF benchmarks nearly doubled as Qatari LNG suspended Hormuz transit. Goldman's current base assumption now extends disruption to 21 days at roughly 10% of normal flows, up from an earlier 10-day forecast. If the closure reaches May, Goldman warns that Asian LNG rationing could escalate into rationing of entire electricity grids.