Oil supply fears deepen as Goldman warns Brent could rise above $120

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Oil supply fears deepen around Hormuz

New attack raises pressure on key oil routes

The UK Maritime Trade Operations received a report that a vessel transiting the Strait of Hormuz had been struck by a projectile. The extent of the damage and the condition of the crew remained unclear at the time of publication.

The incident comes as conditions continue to deteriorate around the Middle East’s key energy routes. Saudi Arabia had earlier temporarily halted operations on the East-West Pipeline following a drone attack. The route has become increasingly important after disruptions to traffic through Hormuz and had been carrying roughly 4–5 million barrels of oil per day in recent months, equivalent to around 4–5% of global supply.

The latest attack is reinforcing concerns that the disruption could persist. Brent has already moved back above $100 per barrel, while further restrictions on Gulf exports could keep the geopolitical risk premium elevated across the oil market.

Goldman Sachs sees Brent risk above $120

Goldman Sachs believes the current oil shock could last considerably longer than markets initially expected. Dan Struyven, global co-head of commodities at the bank, said supply disruptions caused by the U.S.-Iran conflict could potentially extend into 2027.

According to The Australian, Goldman sees Brent potentially rising above $120 per barrel if average Gulf production next year remains roughly 4 million barrels per day below pre-war levels.

The bank says the key variables will be the intensity of attacks on tankers and the pace at which exports through Hormuz and the Red Sea recover. Goldman has also highlighted risks to the LNG market, warning that global LNG prices could rise by around 55% if Middle Eastern exports fail to recover materially.

Energy crisis supports demand for safe-haven assets

The risks are already extending beyond the oil market. Goldman Sachs expects a prolonged energy shock to support demand for gold, with the bank seeing the metal potentially reaching around $4,900 per ounce by the end of 2026.

Energy markets have already shown how sensitive they remain to further escalation. As previously noted, oil and natural gas prices surged as geopolitical risks intensified and concerns over supply disruptions mounted. That reinforces Goldman Sachs’ scenario in which prolonged export constraints could keep energy prices elevated for far longer than just a few weeks.

The slower traffic recovers through the region’s key maritime routes, the greater the risk that the energy crisis remains a major driver of inflation and global markets well into next year.

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