Goldman Sachs Oil Price Outlook: Brent at $80 or Above $120 by Q4 2026?

Goldman Sachs has published a series of research notes that carve out a clear distinction between its base case and a worst-case risk scenario for Brent crude prices amid the U.S.-Iran conflict. Here is what the bank's analysis shows — and how three key maritime chokepoints are driving the volatility.

Goldman Sachs' Base Case: $80 Brent in Q4 2026, $75 in 2027

The current base case assumes the U.S.-Iran interim agreement holds and the Strait of Hormuz reopens, allowing Gulf exports to return to near pre-conflict levels . That outlook gives:

• Brent Q4 2026: $80 per barrel
• Brent 2027 average: $75 per barrel

After the preliminary deal was announced in June 2026, Goldman cut its Q4 forecast from $90 to $80 and its 2027 average from $80 to $75, arguing the market had largely priced a recovery .

The Worst-Case Scenario: $120+ by Q4 2026

If Hormuz disruptions persist rather than resolve, Goldman warns Brent could climb above $120 a barrel by Q4 2026 . In an extended closure scenario, the bank has flagged Brent could surpass its all-time high from 2008, reaching above $130 .

This is explicitly labeled a risk scenario, not the central forecast . The conditions required: continued blockage of the Strait of Hormuz, no diplomatic resolution, and ongoing destruction of physical market balances. In a note from July 2026, Goldman said Brent could average roughly $100 through 2027 if Hormuz remains disrupted .

What Drove the Swings — The Three Chokepoints

Goldman's analysis identifies three maritime chokepoints that have contributed to market tightening and price volatility.

Chokepoint	Role in Goldman's Analysis
Strait of Hormuz	Dominant factor — Goldman called this the "largest-ever supply shock" in oil market history . A full closure removes roughly 17 million barrels per day of Gulf crude and products.
Red Sea (Bab el-Mandeb)	Houthi attacks on shipping have added a persistent risk premium and disrupted tanker routing, noted in recent Goldman reports . Flows through the Bab el-Mandeb averaged nearly 9 million bpd in recent months, making Red Sea disruptions significant for global supply .
Black Sea	Reduced Russian exports from war-related sanctions and insurance constraints compound the physical tightness in the Atlantic Basin, though less emphasized than Hormuz. Escalating Russia-Ukraine conflict has also reduced Kazakhstan's exports .

Physical Market Tightening and Reduced Exports

Beyond the chokepoints, several factors have tightened physical market conditions:

• Hormuz closure directly choked off the vast majority of Gulf (Saudi, Iraq, UAE, Kuwait, Iran) crude exports, creating what Goldman called a supply shock without modern precedent .
• Russian export constraints from the ongoing war and sanctions further tightened the Atlantic Basin market, adding to the bid on non-sanctioned grades.
• Strategic stockpiling by refiners and governments during the conflict added incremental demand that tightened physical balances further .
• Low global inventories meant the market had almost no buffer, amplifying price swings. U.S. crude inventories dropped by 7.2 million barrels to 426.5 million, nearly 5% below the five-year average, while distillates sat 13% below normal .

How the Price Path Evolved Through 2026

The bank's forecasts shifted repeatedly as the conflict unfolded:

• March 2026 (early war): Goldman raised its full-year 2026 Brent forecast from $77 to $85 and warned Brent could exceed its all-time high if Hormuz stayed blocked .
• April–May 2026 (war continues): As the stalemate dragged on, Goldman lifted Q4 Brent to $90, with risks of sustained $100+ .
• June 2026 (Hormuz deal announced): Goldman cut Q4 Brent to $80 and 2027 to $75, arguing the market had largely priced a recovery .
• July 2026 (deal implementation stalls): Goldman reaffirmed the $80 Q4 base case but flagged that renewed disruption risk could push Brent to $120+ .

The $70 Question: Downside Risk, Not the Main Forecast

Goldman's base case for Q4 2026 is $80, not $70. The bank's published 2027 average is $75 . However, Goldman has noted that a faster supply normalization or softer demand could push Brent to around $70 in late 2026 and $60 in 2027 — a downside risk scenario, not the main forecast . The original early-war base case (March 2026) had Brent easing to the $70s by Q4 2026 on a gradual Hormuz recovery, but that expectation was revised upward as the war persisted .

Key Takeaways for Investors

• Base case vs. risk scenario: The $80 Brent forecast is the central expectation; the $120+ call is a contingency, not a prediction.
• Strait of Hormuz is the dominant variable: Its status — open, partially disrupted, or closed — determines the entire price range.
• Three chokepoints matter: Hormuz gets the headlines, but the Red Sea and Black Sea disruptions compound the tightening effect.
• Low inventories amplify swings: With limited buffer, even small supply changes can produce outsized price moves.
• Downside risk exists too: A faster resolution or softer demand could bring Brent to $70 in late 2026, though this is not the central forecast.