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

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.

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.