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    Home » Goldman Sachs Warns Oil Prices Could Reach 120 Amid Rising Regional Tensions
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    Goldman Sachs Warns Oil Prices Could Reach 120 Amid Rising Regional Tensions

    July 22, 2026
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    NEW YORK / RankWire.AI / – Global energy markets face renewed upward price pressures as ongoing maritime disruptions in the Middle East constrain maritime transit routes for petroleum shipments. In a detailed commodities analysis published by Goldman Sachs Group Inc., analysts outlined scenarios where persistent shipping delays could push Brent crude benchmarks to higher levels in the fourth quarter. The key factor is transit restrictions through the Strait of Hormuz, a vital maritime corridor through which nearly twenty percent of global traded petroleum normally passes. Prolonged delays in navigation across the Persian Gulf have cut export flows, depleting short-term supply buffers and raising spot market premiums worldwide.

    Goldman Sachs warns oil could hit 120 as regional tensions rise
    Crude prices face upside risks as Strait of Hormuz stays disrupted. (AI-generated image)

    The report notes that Goldman Sachs warns oil could reach 120 per barrel if maritime disruptions in the Strait of Hormuz continue throughout the fourth quarter. Current data shows that crude oil and refined petroleum flows through the narrow strait have fallen below 45 percent of pre-conflict levels. Although alternative routes exist, such as overland pipelines through Saudi Arabia and secondary maritime paths via the Red Sea, their combined capacity is still insufficient to compensate fully for the volume lost from blocked Persian Gulf ports. As a result, global inventories are being drawn down faster, making energy importers more vulnerable to immediate supply shocks.

    Despite this upside risk, the investment bank states that a price spike above $120 per barrel is not its central forecast. Under the baseline scenario, which assumes a gradual easing of regional geopolitical tensions and a slow restoration of maritime transit, Goldman Sachs forecasts Brent crude to average $80 per barrel in the fourth quarter and $75 per barrel in the following year. However, analysts led by Daan Struyven highlighted that risks to these forecasts remain heavily weighted to the upside. Ongoing military activity, potential naval blockades, and rising marine insurance premiums continue to support elevated risk premiums across global oil futures.

    Regional Transit Disruptions Pose Threat to Global Energy Market Stability

    Market volatility has increased following recent swings in benchmark crude futures. Front-month Brent crude contracts surged past $91 per barrel before easing slightly as physical refiners paid higher premiums for immediate cargoes. The growing gap between prompt and future contracts indicates rising concerns among industrial buyers regarding physical supply availability. Data from the International Monetary Fund suggests that sustained energy price increases of this magnitude could reignite global consumer inflation, widen trade deficits for energy-dependent nations, and lead central banks to delay monetary easing measures across major economies.

    Tracking vessel movements shows that commercial tanker activity through Persian Gulf choke points remains limited, despite sporadic diplomatic efforts to establish maritime transit corridors. Major international shipping registries advise operators to exercise extreme caution or reroute vessels when possible. The International Energy Agency’s supply reports reveal that while emergency strategic reserves are still available, private inventories in key consuming regions have fallen below five-year averages. This depletion reduces the global market’s capacity to absorb sudden drops in Middle Eastern crude production or export disruptions.

    Structural Supply Limitations Heighten Upstream Risks

    From a macroeconomic perspective, Goldman Sachs warns that oil could reach 120 per barrel if alternative transportation infrastructure fails to reroute trade flows effectively. While weaker demand in major Asian markets and price elasticity may mitigate extreme price swings, physical supply constraints remain the main structural drivers. The report emphasizes that inventory reductions in the second quarter have lowered global buffers, increasing market sensitivity. Even minor disruptions to Gulf shipping or refining infrastructure could trigger rapid price increases, impacting global refining margins, transportation costs, and chemical feedstock prices across international industries.

    Looking forward, market participants are closely monitoring daily tanker transit volumes through the Strait of Hormuz, export reports from Gulf producers, and emergency policy measures from major consumers. Institutional investors and corporate commodity users are adjusting hedging strategies to account for the expanding range of potential price outcomes. While diplomatic efforts to enhance maritime security continue behind closed doors, the energy markets remain extremely sensitive to physical trade flows. Until transit through the Persian Gulf stabilizes at its historical capacity, global crude benchmarks will continue to carry a significant geopolitical risk premium driven by maritime security concerns.

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