Goldman Sachs analysts said Brent crude oil prices could rise above $120 per barrel in the fourth quarter of 2026 if supply disruptions at the Strait of Hormuz continue [1, 2, 3]. The London-based investment bank’s baseline forecast predicts Brent crude averaging around $80 per barrel in Q4 2026 and $75 per barrel for all of 2027, assuming tensions in the Middle East ease [1, 2, 3].
The surge in oil prices comes amid escalating conflict in the Middle East and a steep decline in Persian Gulf oil flows, which Goldman Sachs estimates have dropped below 45% of pre-war levels [1, 2]. Analysts including Daan Struyven noted, "Escalation in the Middle East and the decline in estimated Persian Gulf flows to below 45% of pre-war levels have pushed oil prices back up" [1]. Similar warnings were issued by Goldman Sachs sources in Chinese and Taiwanese reports [2, 3].
Renewed fighting between US and Iran forces and threats posed by Tehran-backed Houthi rebels to block Saudi oil shipments through the Red Sea roiled global energy markets in July 2026 [1, 2]. Brent crude futures climbed above $91 a barrel in July after peaking at over $126 in late April during the initial phase of the conflict [1, 2, 3]. Lower global oil inventories in the second quarter further amplified market sensitivity to supply shocks, even as weakening Chinese imports and higher demand elasticity may temper some price increases [1, 2].
Goldman Sachs also recommended that investors hedge against geopolitical and supply risks by taking long positions on European diesel timespreads for December 2026 to March 2027, citing tight diesel markets [1]. Factors constraining price spikes include softer Chinese demand, rising US production, and strategic reserve releases [3].
The firm’s latest analysis was published on July 20, 2026, amid intensifying Middle East tensions and ongoing disruptions to key shipping routes [1, 2].
