Goldman Sachs Raises Oil Forecasts, Citing Largest-Ever Supply Shock From Hormuz Disruption

Goldman Sachs raised its full-year 2026 oil price forecasts last week, projecting Brent crude at $85 per barrel and West Texas Intermediate at $79, after describing the near-closure of the Strait of Hormuz as "the largest-ever supply shock" in the firm's modeling history. The revisions, up from prior forecasts of $77 for Brent and $72 for WTI, landed on March 23 and were led by Daan Struyven, co-head of Global Commodities Research and head of Oil Research at Goldman.

The upward revision rests on the assumption that oil flows through Hormuz will operate at just 5 percent of normal capacity for six weeks, before gradually normalizing over the following month. That central scenario is sharper than what Goldman had been running just days earlier. In a note from around March 12, Goldman analysts assumed 21 days of low Hormuz flows at roughly 10 percent of normal levels, compared to their previous expectation of only a 10-day disruption. By March 22, Struyven's team had tightened that assumption further, and Goldman projected that crude-production losses in the Middle East would rise from 11 million barrels a day to a 17-million-barrel-a-day peak, assuming a gradual four-week recovery after a full reopening of Hormuz. Assuming that reopening occurs, cumulative oil losses are expected to exceed 800 million barrels.

The revisions came in rapid succession across several weeks. Goldman's commodities desk raised short-term Brent forecasts for March and April to $110 per barrel from $98 in the March 22 note, reflecting how punishing the near-term supply math has become when throughput is essentially shut off. Since the conflict began on February 28, 2026, Brent has surged more than 36 percent and WTI roughly 39 percent.

Goldman also revised its Q2 2026 TTF natural gas price forecast to €63 per megawatt-hour from €45, after Qatar's Energy Minister indicated that disruptions to Qatari LNG exports, which represent 20 percent of global LNG supply, could last longer than initially assumed. Goldman separately raised earnings estimates for European oil majors by 55 percent on average for 2026, placing those estimates roughly 38 percent above consensus, and increased Singapore refining margin forecasts for the second half of 2026, as disruptions drove refined product prices higher than crude.

The Goldman analysts wrote that "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." That structural argument has taken on weight as the timeline lengthens. At least 40 energy assets across nine countries in the Middle East have been "severely or very severely" damaged since the conflict began.

IEA Executive Director Fatih Birol, speaking at the National Press Club in Canberra on March 23, said: "This crisis, as things stand, is now two oil crises and one gas crash put all together." Birol noted that in each of the 1970s oil crises the world lost about 5 million barrels per day, totaling 10 million barrels per day combined, and said "today we lost 11 million barrels, so more than two major oil shocks put together."

As Iran continued its stranglehold on the Strait, President Donald Trump gave a 48-hour deadline for Tehran to open the waterway to all ships, saying that otherwise the United States would "obliterate" Iran's power plants. Iran responded by saying it would retaliate with attacks on U.S. and Israeli energy and infrastructure assets.

The inventory picture adds a layer of complexity to Goldman's modeling. Despite acute tightness across Asia, commercial crude stockpiles in American and European OECD countries were still rising, as global supply had been exceeding demand before the war began. That buffer has provided some cushion in Western markets, but Goldman's scenario analysis makes clear it will erode quickly if Hormuz flows remain at 5 percent of normal. In extreme scenarios, Goldman has warned that prices could theoretically approach the July 2008 WTI peak of $147.25 per barrel.

For anyone on the commodities desk or in Goldman's energy coverage groups, the pace of these note revisions, three material updates across roughly two weeks, signals that the firm's base case remains a moving target until there is clarity on when, or whether, the strait reopens.