Goldman Sachs warns of upside oil price risk as Hormuz flows reverse
While maintaining a base case Brent price of $80 a barrel for the fourth quarter of 2026, Goldman Sachs analysts note that stalled recovery in Persian Gulf exports could push crude above $110 a barrel.
Goldman Sachs has issued a fresh warning to clients regarding the outlook for Persian Gulf oil flows, stating that the recent recovery in exports has reversed. The bank cites renewed attacks on tankers in the Strait of Hormuz and the reinstatement of a US naval blockade of Iranian ports as primary drivers for the shift in market dynamics.
According to the bank, flows have pulled back below 50% of pre-war levels, equating to roughly 11 million barrels a day. Goldman estimates a specific daily shortfall of 13.4 million barrels in Persian Gulf flows, a gap that could force demand destruction or inventory draws unless tensions ease. The bank has revised its risk assessment to be skewed to the upside in the near term.
While maintaining its base case Brent price forecast of $80 a barrel for the fourth quarter of 2026 and $75 for 2027, Goldman Sachs noted that a stalled recovery could see prices overshoot $110 a barrel this quarter. The bank also outlined a downside case where prices could slide into the $60s by year-end if production beats forecasts and demand recovers slowly.
The disruption is complicated by signs that Chinese crude imports may have bottomed after a significant year-over-year decline. Goldman highlighted that Chinese stockpiles are approximately 1.9 billion barrels, covering roughly 117 days of demand, which may delay an urgent rebound in buying despite potential increases in July and August.
Data accuracy remains a factor, as mid-June flow estimates were later revised up by 1.1 million barrels a day due to ghost cargoes, or tankers operating with transponders switched off. The bank noted that official flow data likely understates how much is actually moving through the strait.
