GOLDMAN Sachs has revised its projections for crude oil prices, forecasting that Brent crude will average $71 per barrel in the final quarter (Q4) of the year, while West Texas Intermediate (WTI) is expected to average $67 per barrel over the same period, according to analysts cited by Reuters.
The latest estimate represents an upward adjustment from the bank’s earlier forecast, which had placed Brent at $66 per barrel and WTI at $62 per barrel for the final quarter of 2026. Despite the forecast levels, market prices are currently far higher, with Brent trading around $97.26 per barrel and WTI above $91.94 per barrel as of 8.11am Nigerian time on Thursday.
Goldman analysts based the revision on a scenario in which oil flows through the Strait of Hormuz are sharply disrupted. In the new model, shipments through the strait are expected to drop to about 10 percent of pre-war volumes for 21 days, before gradually returning to normal levels over the following month. Previously, the bank had assumed the disruption would last around 10 days.
Oil prices initially declined after the emergency release was announced but quickly rebounded as fresh reports pointed to worsening security risks in the region. The conflict has raised concerns that disruptions to global energy supply could persist.
READ ALSO: Iran’s Hormuz mines threaten one-fifth of global oil trade
Meanwhile, members of the International Energy Agency (IEA) earlier this week agreed to release 400 million barrels of crude from strategic reserves in a coordinated move aimed at easing pressure on global energy markets. Goldman’s earlier modelling had assumed a smaller release of about 254 million barrels, along with an additional 31 million barrels from Russia. Analysts said such a combined release could offset roughly half of the potential supply shock.
Recent updates from the region indicate that vessels have come under attack, with reports attributing the incidents to Iran. According to Reuters, six ships have been targeted so far, including two tankers near the coast of Iraq, prompting Iraq to shut down all of its oil export terminals.
Sources also told Reuters that the United States Navy has declined requests to escort commercial vessels in the area, citing the high risk of further strikes.
Earlier Q2 projections
The U.S. investment bank had earlier projected Brent crude to average $76 per barrel between April and June, up $10 from its previous forecast, Economy Post reported.
The bank had also raised its forecast for WTI crude, predicting an average price of $71 per barrel for the same period, a $9 increase from its earlier estimate. These revisions reflected mounting concerns over the depletion of global oil inventories, particularly in advanced economies, should the disruption persist.
The investment bank also provided a range of potential price impacts depending on the duration and severity of the disruption. Estimates suggested oil could rise by $1 to $15 per barrel. A complete one-month closure of the strait, without alternative supply offsets such as pipeline rerouting or releases from strategic reserves, could push prices up by the maximum $15 per barrel, Goldman Sachs said.
READ ALSO: Goldman Sachs raises Q2 Brent oil forecast on Strait of Hormuz disruptions
It highlighted that Middle Eastern producers could mitigate some of the risk by using existing spare pipeline capacity, roughly 4 million barrels per day (mb/d). Even with full utilisation of these bypass routes, a one-month closure would still likely lift oil prices by around $12 per barrel.
“The International Energy Agency estimates that about 4.2 mb/d of the oil currently transported through the Strait of Hormuz can be redirected via existing pipelines, leaving approximately 16 mb/d at risk if the strait were fully closed,” Goldman Sachs noted. This underscored the strategic importance of the strait in global energy flows and the sensitivity of markets to disruptions in the region.
