As the conflict in the Middle East enters its fourth week, spot Brent and WTI crude oil prices have surged to $112 and $98, respectively. Based on the extended supply disruption period and the reshaping of global energy security logic, Goldman Sachs has raised its oil price forecasts for this year and next, warning that in extreme cases, oil prices could break historical records—$147.
According to news from the Wind Trading Desk, Goldman Sachs analysts Daan Struyven and his team released the latest crude oil market report, indicating that due to the ongoing geopolitical conflict in the Persian Gulf, the shipping disruptions in the Strait of Hormuz are more severe than expected, and the market is facing a structural repricing of supply risks.
The bank expects that the average price of Brent crude oil will reach $110 in March to April this year (previously expected at $98), a significant increase of 62% compared to the average price for the entire year of 2025. At the same time, the average price forecast for Brent crude oil for the entire year of 2026 has been raised to $85, while the average price for 2027 remains high at $80.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/4495489e-75e4-4f76-9c15-81ab107ce5ad.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/4495489e-75e4-4f76-9c15-81ab107ce5ad.png"/>
<h2>Core Logic: The &#34;Disruption&#34; Hypothesis from 3 Weeks to 6 Weeks + Structural Security Premium</h2>
Analysts candidly stated in the report that the most direct reason for raising prices is the revision of expectations for the flow through the Strait of Hormuz (SoH).
<blockquote>
“First, we now assume that the flow through the Strait of Hormuz will only maintain at 5% of normal levels for up to 6 weeks (previously the bank expected it to maintain at 10% for 3 weeks), followed by a slow recovery period of 1 month.”
</blockquote>
There are three theoretical paths for the recovery of flow through the Strait of Hormuz (SoH): Iran allowing some vessels to pass safely, de-escalation of the conflict, and military escort.
However, analysts emphasize that uncertainty remains high, but their &#34;6-week&#34; setting lies between the two: on one side, U.S. policymakers have mentioned that military actions may last 4-6 weeks, and on the other side, the median duration of the conflict reflected in the prediction market. The report cites the probabilities from the prediction market: a 24% chance that the conflict will end before April 15, a 39% chance before April 30, and a 50% chance before May 15.
In addition to the longer disruption hypothesis, another core logic of the report is—structural security premium:
<blockquote>
“Secondly, the market has recognized the risks brought about by the high concentration of production and spare capacity, which is very likely to lead to structurally higher strategic reserves and long-term forward price increases.”
</blockquote>
The report believes that the “largest scale of oil supply shock” will force policymakers and the market to reprice: the high concentration of production and idle capacity in the Middle East, along with fragile energy infrastructure, will lead to higher strategic reserve replenishment and higher forward price &#34;security premiums&#34; in the future. The report also defines idle capacity as capacity that can be brought online within 30 days and sustained for at least 90 days.
<h2>Two Extreme Scenarios: Oil Prices May Break the $147 Record</h2>
Goldman Sachs detailed two scenarios of &#34;upside deviation&#34; risks in its report, indicating that if the disruption in the Strait of Hormuz extends to 10 weeks, global oil prices will enter unknown territory.
<blockquote>
&#34;In both of these risk scenarios, Brent crude oil prices are likely to exceed the historical record set in 2008 ($147).&#34;
</blockquote>
In the &#34;adverse scenario,&#34; Middle Eastern supply gradually recovers after the Strait reopens, with Brent oil prices potentially averaging $140 in April. Subsequently, as supply and demand respond to high prices, prices converge to $100 in Q4 2026 and $90 in Q4 2027.
In the &#34;severely adverse scenario,&#34; if there is a sustained loss of 2 million barrels per day in Middle Eastern production (i.e., &#34;production scars&#34;), referencing the five largest supply shocks in the past 50 years, the estimated average production impact on affected countries is 42% four years later; providing context: Iran and seven other Gulf countries will account for 30% of global crude oil output in 2025. In this scenario, Brent initially surges sharply, then converges to $115 in Q4 2026 and $100 in Q4 2027.
<h2>High Oil Prices Will Last Longer</h2>
Goldman Sachs emphasized that even if the Strait eventually reopens, oil prices will not quickly fall back to pre-war levels. Goldman raised its 2026 Brent average price forecast to $85 per barrel (up from $77), and WTI average price to $79 per barrel (up from $72).
The report highlights that this is the largest oil supply shock in history. So far, the estimated shortfall in Gulf crude oil exports has reached 17.6 million barrels per day. This extreme risk will prompt policymakers and markets to reassess the risks associated with the highly concentrated Middle Eastern production capacity.
<blockquote>
&#34;The scale of this shock is too large for policy measures to fully offset during or even after the disruption. We expect policymakers to rebuild higher strategic reserve levels after the Strait reopens, and the market will also factor in a safety premium in forward prices.&#34;
</blockquote>
Goldman Sachs believes the reasons for &#34;longer and higher&#34; oil prices are:
<ol>
<li>
Massive Inventory Shortfall: By Q4 2026, global commercial oil inventories are expected to face a net loss of about 510 million barrels.
</li>
<li>
Strategic Reserve Rebuilding: After the Strait reopens, policymakers in various countries will be compelled to replenish strategic reserves (SPR) for energy security, creating long-term additional demand.
</li>
<li>
Elevated Forward Curve: Due to the awareness of the vulnerability of energy infrastructure, the market will factor in a &#34;safety premium&#34; of about $4 in forward prices.
</li>
</ol>
<h2>Downside Risk for Oil Prices: U.S. Export Restrictions Risk</h2>
While highlighting upside risks, Goldman Sachs also pointed out potential downside factors. If the U.S. government halts military actions at any time, the risk premium will quickly decline. Additionally, although it is not the baseline scenario, Goldman does not rule out the possibility of the U.S. implementing oil export restrictions.
The report analyzes that although officials from the Trump administration have stated there are currently no plans to restrict energy exports, under the International Emergency Economic Powers Act (IEEPA), the executive branch has this authority
If the United States restricts crude oil and refined oil exports, it will lead to a further widening of the price difference between WTI crude oil and the global benchmark price (Brent). Local refinery costs may not necessarily decrease due to falling domestic oil prices; instead, they may reduce production due to a backlog of diesel inventory, ultimately driving up gasoline prices in the United States

FBRT

Goldman Sachs extended the duration of the "only 5%" flow through the Strait of Hormuz from 3 weeks to 6 weeks and introduced a higher structural safety premium. As a result, the bank raised the average price of Brent for March-April to $110 and the average price for 2026 to $85. If the disruption in the Strait of Hormuz extends to 10 weeks, Brent crude prices could surpass the 2008 record of $147

- As the Middle Eastern conflict extends into its fourth week, Brent and WTI crude oil prices have surged to $112 and $98, respectively.  
- Goldman Sachs has raised oil price forecasts for the next two years due to prolonged supply disruptions and has warned that unprecedented high prices may exceed $147 under extreme scenarios.  
- The report also highlights significant structural risks in oil supply, predicting 2026 Brent prices to average $85 and suggesting that even post-conflict, prices will remain elevated due to strategic reserve rebuilding and market adjustments.

Wallstreetcn

WisdomTree Brent Crude Oil Longer Dated

VanEck Oil Services ETF

Occidental Petroleum

SPDR O&G Equip

Invesco DB Multi Sector Comm TR Oil Fd ETF

WisdomTree Bloomberg WTI Crude Oil

SPDR O&G Ex & Prd

WisdomTree Brent Crude Oil 1mth

iShares US Oil & Gas Expl & Prod

BP p.l.c.

Pro K1 Free Crude Oil

United States Oil Fund LP

WisdomTree Brent Crude Oil

WisdomTree WTI Crude Oil

Us Brent Oil

SPDR Energy Select

VanEck Oil Refiners ETF

iShares US Oil Equip & Svcs

ISHRS S&P Glb Engy

VG Energy

Pro Ultr Bloomberg Crude Oil

WisdomTree WTI Crude Oil 2mth

Revised oil price expectations again! Goldman Sachs' latest assessment: high oil prices will last longer, and in two scenarios, oil prices will reach historical highs