Goldman Sachs Warns $120 Oil Price Possible as Persian Gulf Tensions Persist

Goldman Sachs has increased its oil price forecasts, warning that Brent crude oil could surge above $120 per barrel if supply disruptions in the Persian Gulf continue. Analysts led by Daan Struyven at Goldman Sachs raised their year-end forecast to $90 from $80 per barrel and the average for 2027 to $80 from $75.

The analysts noted that commercial land inventories in OECD economies have barely reduced since the war started, and expect continued supply adaptation through 'dark,' unrecorded flows via the Strait of Hormuz and redirected pipelines. They also caution that alarmist oil forecasts may be overstated, with global stocks still above operational minimums.

This prediction comes as a stark contrast to Treasury Secretary Scott Bessent's forecast, who predicted a significant decrease in oil prices to $40-$50 per barrel after the Iran conflict resolution. Bessent attributed this to a surge in oil supply and a decline in the Strait of Hormuz's importance due to Gulf nations developing alternative pipeline routes.