Goldman Sachs economists have warned that any significant disruption to oil shipments through the Strait of Hormuz could push Brent crude prices over $100 per barrel, potentially causing a sharp rise in transport costs, inflation, and slowing global growth.
Despite an early spike in oil prices that quickly subsided, Goldman Sachs analysts predict that a disruption in supplies from the Middle East, especially through the vital Strait of Hormuz, would cause energy prices to soar.
The investment bank estimates that if oil flows through the Strait of Hormuz were cut by half for a month and then remained 10% lower for another 11 months, Brent crude could spike briefly to as high as $110 per barrel. This level would mark the highest price since August 2022 and nearly a third higher than the current price of around $77 per barrel.
If Iranian oil supply alone fell by 1.75 million barrels per day, Brent prices would peak at about $90 per barrel, according to analysts including Daan Struyven.
However, Goldman Sachs’ baseline scenario assumes that physical disruptions to Iran’s supply and the broader regional oil and gas production and shipping are avoided. Under this assumption, Brent crude is forecast to fall to around $60 per barrel by the end of the year.
The warning comes amid heightened tensions in the region after Iran’s parliament voted to shut down the Hormuz shipping channel, a crucial artery carrying about 20% of global oil shipments, in retaliation against U.S. military actions.
Goldman analysts argue that there are strong economic incentives for key players - including the U.S. and China - to prevent a sustained and large-scale disruption to the Strait of Hormuz, underscoring the critical importance of this route to global energy security.
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