Goldman Sachs Raises Oil Forecasts Amid Record Hormuz Supply Shock

Goldman Sachs has sharply revised its oil price forecasts for 2026, projecting that Brent crude will average $85 a barrel this year — up from an earlier estimate of $77 — as the prolonged disruption of flows through the Strait of Hormuz inflicts what the bank describes as the largest supply shock in the history of the global crude market.

The full-year outlook for West Texas Intermediate was raised to $79 from $72, analysts, including Daan Struyven, said in a note dated 22nd March.
For Nigeria, whose 2026 budget was benchmarked at a considerably lower oil price, the revision carries significant fiscal implications.

The assumptions behind the numbers
Goldman’s revised forecasts rest on an assumption that flows through Hormuz — the narrow waterway connecting the Persian Gulf to global markets, through which roughly 20 per cent of the world’s oil passes — will remain at just 5 per cent of normal levels for six weeks, followed by a one-month recovery. On that basis, the bank estimates cumulative supply losses of just over 800 million barrels, with crude production losses in the Middle East rising from 11 million barrels a day currently to a peak of 17 million barrels a day before a gradual recovery.

The shock is already creating acute tightness in Asian markets, though Goldman noted that commercial crude stockpiles in American and European OECD countries were still rising, reflecting the global supply surplus that existed before the war began.

A crisis without modern precedent
Goldman’s characterisation of the disruption as historically unprecedented found a prominent echo in Canberra on Monday, where International Energy Agency Executive Director Fatih Birol told a media event that the effect of the current disruptions was equivalent to the two major oil crises of the 1970s and the 2022 natural gas crisis that followed Russia’s invasion of Ukraine, combined.

“The largest oil supply shock ever will likely lead policymakers and markets to recognise the structural risks from the high concentration of production and spare capacity in the Middle East,” the Goldman analysts wrote, “and from the vulnerability of energy infrastructure.”

The warning lands as the conflict enters its fourth week with no sign of resolution. President Donald Trump this week handed Iran a two-day ultimatum to reopen Hormuz or face strikes on its power plants. Tehran threatened reprisals. Goldman also separately raised its gas price forecasts, though it did not elaborate in the note.