Goldman Sachs Warns Oil Prices Could Soar to $120 Per Barrel Amid Middle East Tensions

Goldman Sachs has warned that global oil prices could surge to $120 per barrel if Middle East crude shipping disruptions worsen. The bank's co-head of global commodities research, Daan Struyven, said recent developments indicate a substantial risk that disruptions to crude transport could become broader and more severe.

The current price of Brent crude is around $97 per barrel, but it could fall to $80 if regional crude exports return to normal. This is in line with the bank's forecast trend report, which suggests that oil prices have risen to their highest level since July 2025 due to geopolitical tensions.

Struyven recommended a strategy for investors seeking to hedge against geopolitical risk by betting on gains in natural gas and refined products rather than crude. He noted that supply shocks are having a bigger impact on these markets, causing prices to rise significantly. Diesel prices have more than doubled this year, while natural gas prices continue to climb.

China is expected to help stabilize the crude market by cutting oil imports in response to higher prices, but it is not providing the same buffer in natural gas and refined-products markets, according to Struyven.