Goldman Sachs has issued a stark warning: Brent crude oil prices could surge to $120 per barrel if the Strait of Hormuz remains closed due to the ongoing US-Iran conflict. The investment bank notes this scenario could trigger the largest supply disruption in oil market history, a systemic shock of 15-20 million barrels per day. Current benchmarks show Brent near $86.50 and WTI around $80.66.
This risk assessment comes as markets price in the delicate diplomatic situation. While the probability of WTI hitting $120 in July is currently seen as low, trading activity shows rising expectations for prices to reach $90. The warning underscores significant market anxiety over a prolonged closure.
All eyes are on the Strait of Hormuz. Key developments to watch include official announcements from the Iranian Ministry of Shipping and the progress of preliminary US-Iran negotiations aimed at reopening the critical waterway. Any geopolitical escalation or failure in diplomacy could further support scenarios for sharply elevated oil prices.