Goldman Sachs raises Brent forecast $9 to $76 on Hormuz risk

Goldman Sachs raised its long-term Brent crude forecast by $9 to $76 a barrel, warning that near-term Persian Gulf exports face "high uncertainty" after tanker attacks and renewed US-Iran fighting over the Strait of Hormuz.

Goldman Sachs raised its three-year Brent crude forecast by $9 to $76 a barrel, warning that tanker attacks and renewed US-Iran confrontation have created "high uncertainty" for Persian Gulf exports in the near term. The bank said the recent escalation highlights how critically Strait of Hormuz shipping畅通 affects short-term oil prices, even as alternative pipeline capacity could reduce that dependence over time.

"The recent attacks underscore the high uncertainty surrounding Persian Gulf exports, and if the situation escalates further, the upside risk to oil prices in the near term could intensify again," Goldman Sachs said in the report dated July 14. The bank noted that Middle East pipeline construction projects have historically been completed relatively quickly, citing regional precedent.

Brent crude jumped nearly 10% on Tuesday, trading near $78 a barrel, after President Donald Trump announced the US would reinstate a naval blockade on Iranian ports and levy a 20% transit charge on commercial cargo through the Strait of Hormuz. The move followed Iranian cruise missile strikes on two UAE-flagged oil tankers in Omani waters that killed one Indian sailor and injured eight crew members. Tanker traffic through the strait fell to a two-month low, with more vessels switching off public AIS tracking transponders, according to Kpler data.

The Strait of Hormuz carries roughly one-fifth of global oil consumption, making it the world's most strategically important energy chokepoint. Iran's military warned it would "deal severely" with any disruption outside Tehran's designated routes, while Foreign Minister Abbas Araghchi mocked Trump's proposed levy, saying Iran — not the US — has always been the strait's "guardian." The International Maritime Organization questioned the legality of unilateral transit fees, saying international law does not permit mandatory charges on vessels passing through an international strait.

Pipeline capacity could reshape the risk calculus

Goldman Sachs estimates that alternative pipeline routes bypassing the Strait of Hormuz could restore more than 45% of pre-war Persian Gulf export volumes by the end of 2027 and more than 60% by the end of 2028. If realized, that capacity expansion would materially reduce the structural risk premium embedded in oil prices, the bank said.

The last time a comparable supply disruption threatened the strait — during the 2019 attacks on Saudi Aramco's Abqaiq and Khurais facilities — Brent spiked nearly 15% in a single day before retreating as Saudi output recovered within weeks. The current conflict involves direct US-Iran hostilities, a broader regional escalation including Yemen and Lebanon, and a formal US blockade, making the risk profile more persistent than the 2019 incident.

For now, the bank's revised $76-a-barrel long-term forecast reflects a higher structural risk premium. But Goldman Sachs cautioned that if pipeline capacity expands as projected, that would pose a downside risk to its long-term price outlook. The next key data point for markets will be whether tanker traffic through the strait stabilizes or declines further in the coming days, and whether diplomatic efforts by Pakistan, Oman and Qatar gain traction.

This article is for informational purposes only and does not constitute investment advice.