Goldman Sachs Warns Oil Prices Could Hit $150 as Hormuz Flows Collapse 97%

Not a single tanker crossed the Strait of Hormuz on March 12. Insurance cancellations had frozen the waterway shut despite the strait remaining physically open, collapsing flows from 19.5 million barrels per day to roughly 0.5 to 0.6 million barrels per day, a 97% drop that Goldman Sachs now says could push oil prices past $150 a barrel before the month is out.

Based on vessel counts in a new tracker note, Goldman Sachs estimates the total reduction in Persian Gulf flows has reached around 16 million barrels per day even after accounting for partial rerouting through Yanbu in Saudi Arabia and Fujairah in the United Arab Emirates. An earlier Goldman summary put the net global supply hit at 17 million barrels per day. Either figure dwarfs any modern supply disruption: Goldman calculates the shock is 17 times larger than the peak production loss recorded in April 2022 after Vladimir Putin ordered the Russian invasion of Ukraine, which sent crude to around $110 a barrel.

The bank had initially expected Hormuz flows to fall to roughly 15% of normal following the recent conflict escalation. Instead, only about 10% of the oil cargoes that usually transit the route have been able to pass, with shipments stabilizing at roughly 0.6 million barrels per day in recent days, according to Goldman's vessel tracking.

Production and refining outages are compounding the supply shock. The International Energy Agency estimated at least 10 million barrels per day of crude and condensate production losses as of March 10. Refinery disruptions in the Middle East have climbed to about 2.0 million barrels per day following a precautionary halt at the UAE's Ruwais refinery, adding another layer to what Goldman describes as a supply shock that current inventory levels in major consuming nations can buffer only temporarily.

Governments have responded, though Goldman Sachs is skeptical the response will be sufficient. IEA member countries have agreed to make 400 million barrels of strategic petroleum reserves available to the market, implying a release pace of roughly 3.3 million barrels per day. Goldman expects OECD countries may cap their actual releases at about 3 million barrels per day to avoid excessive inventory depletion, and the bank has said explicitly that these measures would offset only part of the disruption.

The price reaction since the conflict's outbreak in late February has already been severe. Brent crude is up more than 36% cumulatively and WTI has risen approximately 39%, with both benchmarks briefly breaking above $119 earlier this week, their highest levels since 2022. Goldman now warns that "oil prices would likely exceed $100 next week if no signs of solutions emerge by then," and that it is "likely that oil prices, especially for refined products, would exceed the 2008 and 2022 peaks, if Strait of Hormuz flows were to remain depressed throughout March." Analysts at the bank have separately flagged the possibility of prices reaching $150, a level not recorded since the energy shocks of 2008.

Goldman's base case holds that shipment volumes could gradually recover after March 21, with SPR releases tapering as prices decline. Under that scenario, WTI could fall back below $70 per barrel by early June. The distance between that outcome and $150 depends entirely on whether insurance markets reopen, tankers begin moving again, and the geopolitical situation in the region stops deteriorating.