Wealth Manager Warns Oil Could Surge Above $120 if Persian Gulf Supply Disruptions Continue

Goldman Sachs raised its oil-price forecasts and indicated that crude oil could cross $120 per barrel if supply disruptions in the Persian Gulf continue.

On Monday, analysts led by Daan Struyven at Goldman Sachs raised their oil price forecasts, a significant shift from their stance three months ago. The analysts noted that Brent crude oil could exceed $120 per barrel if the average Gulf output in 2027 remains 4 million barrels per day below pre-war levels, MarketWatch reported.

The analysts increased the year-end forecast to $90 from $80 per barrel, and the average for 2027 to $80 from $75. This change follows a period of optimism during the summer when the firm hoped for an end to violence and a return to normalcy in Middle East supplies.

The firm considers this a relatively moderate oil price rise despite Persian Gulf tensions, due to two reasons. Firstly, the analysts noted that commercial land inventories in economies in the Organization for Economic Co-operation and Development (OECD) have barely reduced since the war started; and secondly, the analysts expect continued supply adaptation through “dark,” unrecorded flows via the Strait of Hormuz and redirected pipelines. The analysts added that alarmist oil forecasts may be overstated, with global stocks still above operational minimums.

Goldman’s Oil Call Defies Bessent’s Outlook

Goldman Sachs’ prediction comes as a stark contrast to that of Treasury Secretary Scott Bessent, who forecasted a significant decrease in oil prices to $40-$50 per barrel after the Iran conflict resolution, attributing it to a surge in oil supply.

Bessent said the Strait of Hormuz’s importance to global oil trade could decline as Gulf nations develop alternative pipeline routes, limiting Iran’s ability to disrupt supplies. He described the current energy shock as temporary, called the U.S. an "energy superpower" and cited strong jobs and wage growth.

Oil Cost for Americans

Meanwhile, President Donald Trump predicted oil prices would "drop precipitously," with gasoline prices falling from $4.15 per gallon nationally to $3 and eventually $2. U.S. gas prices hit a record Labor Day high, with the national average reaching $4.15 per gallon, according to AAA, up from about $3.20 a year earlier and surpassing the previous record of $3.82 set in 2012.

The Iran War Energy Cost Tracker from Brown University estimates that the war has cost U.S. consumers over $100 billion in higher energy prices, with households paying over $760 on average.

At the time of writing, Brent crude oil futures expiring in October were trading 2.09% higher at $98.29 per barrel, while WTI crude futures expiring in October were trading 2.11% higher at $93.41 per barrel.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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