Goldman Lifts Brent Forecast to $90 as Hormuz Crisis Deepens

An unprecedented 11 million barrel-per-day supply shock from the Strait of Hormuz closure has prompted Goldman Sachs to raise its oil price forecasts, warning of 'extreme' inventory draws.

Goldman Sachs has significantly lifted its Brent crude forecast to $90 per barrel for the fourth quarter, a 12.5% increase from its previous $80 estimate, as the ongoing closure of the Strait of Hormuz removes more than 11 million barrels per day from the global market.

"The economic risks are larger than our crude base-case alone suggests because of the net upside risks to oil prices, unusually high refined-product prices, product shortages risks, and the unprecedented scale of the shock,” Goldman analysts Daan Struyven and Yulia Zhestkova Grigsby said in a Monday note.

The bank’s analysis projects a staggering 9.6 million barrel-per-day supply deficit for the current quarter, a sharp reversal from the surplus seen a year ago. This is driven by production losses from the Persian Gulf pulling global oil stockpiles down at a record pace of 11 to 12 million barrels a day throughout April.

The revised outlook, which now assumes Gulf exports normalize by the end of June rather than mid-May, underscores the severe strain on global energy supplies. With US-Iran peace talks stalled, the risk of a prolonged disruption could force an even steeper demand destruction if inventories are exhausted, a scenario energy suppliers like Octopus Energy warn could become "serious" if the strait remains closed past August.

Structural Crisis

The supply shock has prompted some producers to re-evaluate project economics. Trillion Energy International Inc. said Monday the crisis has "materially improved" the outlook for its M47 oil exploration block in southeastern Türkiye. The company framed the disruption as a "structural crisis," arguing its own estimate of a 9.1 million barrel-per-day shortfall surpasses prior shocks, including the Gulf War.

However, traders in the prediction markets are skeptical of a sustained crisis impacting short-term contracts. A market pricing whether crude oil would hit an all-time high by April 30 sits at just a 1% probability, with traders noting the timeline is too short. In contrast, the June contract reflects a 20% chance of crude hitting $90, showing more concern for the medium term.

"If it opens before the end of May, then there is a chance of it being not that bad," Octopus Energy CEO Greg Jackson told BBC Radio 4. "And if it goes on beyond August, things get even more serious.” The UK government is reportedly meeting twice a week to address potential supply chain disruptions.

This article is for informational purposes only and does not constitute investment advice.