President Donald Trump has called the recent oil shock a “little excursion” and predicted that prices will come down fast when the war in Iran is settled.
But the longer the Strait of Hormuz stays closed, the harder that assumption is to defend.
In a note dated April 26, Goldman Sachs commodity analyst Daan Struyven upgraded the firm’s 2026 fourth-quarter Brent forecast from $80 to $90 and West Texas Intermediate from $75 to $83.
It is the fourth upgrade since the war began on Feb. 27, 2026. The fourth-quarter Brent track has moved from $66 to $71 to $80 to $90 — each revision tied to a longer assumed Hormuz disruption.
Why Goldman Sees Higher-For-Longer Oil
The revision reflects slower recovery in Persian Gulf production and delayed normalization of exports, now expected by end-June instead of mid-May. Analysts also raised 2027 estimates to $85 for Brent and $80 for WTI.
“The economic risks are larger than our crude base case alone suggests because of the net upside risks to oil prices, unusually high refined product prices, product shortages risks, and the unprecedented scale of the shock,” wrote the Goldman team.
The numbers behind the upgrade are extreme.
April global oil inventories are drawing at 11-12 million barrels per day (mb/d), the fastest pace on record since satellite tracking began. Gulf crude production has collapsed to 11.9 mb/d from a pre-war run rate of 26.4 mb/d — a 14.5 mb/d hit.
Goldman now sees the market swinging from a 1.8 mb/d surplus in 2025 to a 9.6 mb/d deficit in the second quarter of 2026.
The report estimates a nearly $30 boost to Brent prices from the disruption, driven by lower inventories and higher long-term pricing.
The bank also warned that its baseline understates the upside.
Goldman outlines three key scenarios for Brent in late 2026:
- Base case: $90 per barrel
- Adverse: Just over $100 if exports normalize by end-July
- Severe: Nearly $120 with deeper capacity losses
- Benign: Just under $80 with faster recovery and higher supply
Goldman Sachs’ Oil Price Forecast Update: The Risk Is Now Asymmetric
| Scenario | Q4 Brent | Hormuz Reopens | vs Base case |
|---|---|---|---|
| Benign | ~$80 | Early-May to mid-June | −$10 |
| Base Case | $90 | Mid-May to end-June | — |
| Adverse | ~$100+ | Mid-June to end-July | +$10 |
| Severely Adverse | ~$120 | Mid-June to end-July | +$30 |
The report highlights that inventories could fall to the lowest levels since tracking began in 2018, increasing the risk of sharp, non-linear price spikes.
Goldman analysts see “upside risk to estimated prices in the adverse and severely adverse scenarios because oil inventories are likely to reach very low levels, triggering non-linear price increases.”
Global visible total oil inventories are likely to hit the lowest level since satellite tracking began in 2018, even in the benign case.
Goldman also flagged a tail risk it does not include in the baseline.
“While not our base case, we don’t rule out US oil export restrictions if the Strait remains effectively closed for longer,” the analysts wrote.
The bank cautioned that such restrictions could “reduce US and global crude and products production, and widen the international vs. US price gap.”
What This Means For Investors
The United States Oil Fund (NYSE:USO) is up roughly 94% year-to-date and is on pace for its fourth straight month of gains, after a blockbuster 55.3% rally in March and a 4% advance in April.
Energy was already 2026’s best-performing sector before the upgrade.
The Energy Select Sector SPDR Fund (NYSE:XLE) has gained about 29% year-to-date, while the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) is up 35%, both on track for their strongest performance since 2022.
Higher-for-longer oil prices could fuel earnings growth for U.S. oil producers, while pressuring fuel-intensive industries such as airlines and cruise operators through rising costs.
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