Goldman Sachs Raises Oil Price Forecast Amid Middle East Tensions

Goldman Sachs has revised its oil price forecasts for 2026, anticipating Brent crude to average $71 per barrel, up from the previous estimate of $64, and West Texas Intermediate (WTI) to reach $67 per barrel, an increase from $60. This adjustment reflects concerns over potential disruptions in the Strait of Hormuz, a critical passage for global oil shipments, amid escalating conflicts in the Middle East.

The bank highlighted that if oil flows through the Strait remain stagnant for an additional five weeks, Brent prices could escalate to $100 per barrel, a level that might necessitate demand reduction to prevent critically low inventory levels.

Recent Iranian military actions have intensified regional tensions. Iran has conducted drone strikes on ports in Oman, including Duqm and Salalah, and targeted oil tankers off the coast of Muscat, resulting in casualties and infrastructure damage.

In response to these developments, the International Energy Agency (IEA) announced the release of 400 million barrels from global oil reserves to stabilize markets. Despite these measures, oil prices have remained volatile, with Brent crude futures trading near $82.57 per barrel, the highest since January 2025.

The situation has also impacted global financial markets, with stock indices in Asia and Europe experiencing declines as investors seek safe havens amid the uncertainty.

As the conflict continues, the potential for prolonged disruptions in oil supply remains a significant concern for global markets.