Goldman Lifts Brent Forecast to $110, Warns of New Record High

Goldman Lifts Brent Forecast to $110 on Extended Disruption Fears

Goldman Sachs has materially increased its oil price forecasts as the conflict in the Middle East pushes spot prices for Brent and WTI crude to $112 and $98 per barrel, respectively. In a new report, a team of analysts led by Daan Struyven raised the average Brent price forecast for March and April to $110 per barrel, a notable increase from their previous $98 estimate. Looking further out, the bank lifted its full-year 2026 Brent forecast to $85 per barrel from $77.

The adjustment stems from a more pessimistic outlook on the security of the Strait of Hormuz, a critical chokepoint for global energy supplies. The bank's core assumption now models a six-week period where shipping traffic through the strait falls to just 5% of its normal volume, a sharp revision from its prior expectation of a three-week disruption at 10% flow. This follows weeks of disruptions that have created what Goldman terms the 'largest-ever petroleum supply shock,' with an estimated export shortfall of 17.6 million barrels per day from the Persian Gulf.

Bank Foresees New $4 Security Premium as Supply Risks Mount

Beyond the immediate disruption, Goldman's analysis points to a lasting change in how the market prices energy security. The conflict exposes the vulnerability of a global system where production and spare capacity are highly concentrated in the Middle East. As a result, the bank expects a structural repricing of risk, leading to a permanent 'security premium' of approximately $4 per barrel on long-term forward prices.

This premium reflects the anticipated scramble by nations to rebuild strategic petroleum reserves (SPR) once the strait reopens. The supply shock is projected to cause a net loss of approximately 510 million barrels from global commercial inventories by the fourth quarter of 2026. The subsequent mandatory restocking by policymakers will create sustained demand, preventing prices from quickly returning to pre-conflict levels and supporting the bank's thesis for higher prices for longer.

Extreme Scenarios Could Push Oil Past $147 All-Time High

Goldman detailed two 'upper-deviation' risk scenarios where oil prices could enter uncharted territory. In a scenario where the Strait of Hormuz disruption extends to 10 weeks, the bank states that Brent crude is 'likely' to breach its 2008 all-time high of $147 per barrel. This reflects the immense pressure on global inventories and the market's focus on the risk of a prolonged outage.

In a 'severely adverse scenario,' a persistent production loss of 2 million barrels per day, even after the strait reopens, would also drive prices to extreme levels. In this case, Brent would spike before settling at $115 per barrel in Q4 2026 and $100 per barrel in Q4 2027. Goldman notes this is not without historical precedent, citing that the five largest supply shocks in the last 50 years led to an average production decline of 42% in affected countries four years later.