KEY POINTS
- Goldman Sachs raised Brent oil forecast to $85 and WTI to $79 for 2026 due to severe Strait of Hormuz disruption.
- The bank estimates more than 800 million barrels in supply losses, with Middle East output losses peaking at 17 million barrels per day.
- IEA says the crisis could rival the oil shocks of the 1970s, as geopolitical tensions heighten risks to global energy supply.
Goldman Sachs has raised its oil price forecasts for 2026, citing a severe disruption to crude flows through the Strait of Hormuz that the bank described as the largest supply shock in the history of the global oil market.
In a note dated March 22, analysts led by Daan Struyven projected that Brent crude will average $85 per barrel this year, up from an earlier estimate of $77. The bank also increased its full-year forecast for West Texas Intermediate to $79 per barrel from $72.
The revision carries potential fiscal implications for oil-producing countries, including Nigeria, whose 2026 budget benchmark was set at a significantly lower oil price.
Hormuz disruption drives supply losses
Goldman Sachs based its outlook on the assumption that oil flows through the Strait of Hormuz, a key passageway linking the Persian Gulf to global markets, will operate at just five percent of normal levels for six weeks, followed by a one-month recovery period.
Under this scenario, the bank estimates cumulative global supply losses of more than 800 million barrels. Production losses in the Middle East are projected to rise from about 11 million barrels per day currently to a peak of 17 million barrels per day before gradually easing.
The disruption is already tightening crude availability in Asian markets. However, Goldman noted that commercial crude stockpiles in OECD countries in the United States and Europe were still increasing, reflecting a supply surplus that existed before the conflict began.
The scale of the disruption has drawn comparisons to previous global energy shocks. International Energy Agency Executive Director Fatih Birol said the impact is equivalent to combining the two major oil crises of the 1970s with the 2022 natural gas crisis that followed Russia’s invasion of Ukraine.
Goldman analysts warned that the supply shock could force policymakers and markets to reassess structural risks tied to the concentration of oil production and spare capacity in the Middle East, as well as the vulnerability of critical energy infrastructure.
