Brent Crude Hits $100 as Banks Model $120 Scenarios

Oil prices have been on a tear, and experts are now modeling scenarios where Brent crude reaches $120 a barrel. This is not just a possibility, but several major banks consider it plausible enough to model. Goldman Sachs has raised its year-end Brent forecast to $90 from $80, while warning that a much more severe outcome remains possible.

According to Daan Struyven and Goldman's commodities team, Brent could exceed $120 if average Gulf production in 2027 remains 4 million barrels a day below pre-war levels. HSBC has reached a similar upside number from a different route, seeing Brent around $120 under a prolonged stalemate that keeps flows through Hormuz near depressed levels.

The International Energy Agency expects global oil demand to decline by about 1.6 million barrels a day in 2026, with elevated fuel costs and disrupted trade already reducing consumption. Naeem Aslam, chief investment officer at Zaye Capital Markets, said 'supply tightness supports prices, but demand destruction can cap the upside if crude remains elevated for too long.'

Financial markets are reacting to the rising oil prices, with the S&P 500 falling 0.48% on Wednesday and the Dow losing 0.77%. The US 10-year Treasury yield rose to 4.84%, its highest level since 2023, as investors weighed the inflationary consequences of another energy shock.