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    Home » Goldman Sachs Warns Oil Prices Could Reach 120 Amid Rising Regional Tensions
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    Goldman Sachs Warns Oil Prices Could Reach 120 Amid Rising Regional Tensions

    July 22, 2026
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    NEW YORK / RankWire.AI / – Global energy markets are facing renewed upward pressure on prices as ongoing maritime disruptions in the Middle East limit shipping routes for petroleum shipments. In a detailed commodities research report issued by Goldman Sachs Group Inc., analysts described scenarios where persistent shipping delays could push Brent crude benchmarks to high levels in the final quarter. The main driver is transit restrictions through the Strait of Hormuz, a vital maritime corridor through which nearly twenty percent of global traded oil normally passes. Lengthy delays in navigation across the Persian Gulf have diminished export flows, straining short-term supply buffers and raising spot market premiums worldwide.

    Goldman Sachs warns oil could hit 120 as regional tensions rise
    Crude prices face upside risks as Strait of Hormuz stays disrupted. (AI-generated image)

    The report emphasizes that Goldman Sachs warns oil could reach 120 per barrel if disruptions in the Strait of Hormuz continue through the fourth quarter. Current figures show that flows of crude oil and refined products through this narrow waterway have dropped below 45 percent of pre-conflict levels. Although there are alternative routes, such as pipelines across Saudi Arabia and secondary maritime passages through the Red Sea, their combined capacity is still insufficient to compensate fully for the losses from blocked Persian Gulf ports. As a result, global inventories are drawing down faster, making energy importers more vulnerable to immediate supply shocks.

    Despite the potential for higher prices, the bank maintains that a spike above $120 per barrel is not its central projection. Under the baseline scenario, which assumes a gradual easing of regional geopolitical tensions and a slow return of maritime transit, Goldman Sachs expects Brent crude to average $80 per barrel in the fourth quarter and $75 per barrel in the following year. However, Daan Struyven and his team stress that the risks to these forecasts are skewed toward the upside. Ongoing military activity, possible naval blockades, and rising marine insurance costs keep risk premiums elevated across global oil futures.

    Regional Transit Disruptions Endanger Global Energy Market Stability

    Market volatility has increased following recent swings in benchmark crude futures. Front-month Brent crude contracts surpassed $91 per barrel before easing slightly as physical refiners paid higher premiums for immediate delivery. The gap between spot and future contracts signals growing concern among industrial buyers about physical supply availability. Data from the International Monetary Fund indicates that sustained increases in energy prices of this magnitude could reignite global consumer inflation, worsen trade deficits for energy-dependent nations, and cause central banks to postpone planned monetary easing measures across major economies.

    Tracking data shows that vessel movements through Persian Gulf choke points remain tight despite sporadic diplomatic efforts to open transit corridors. Major shipping registries advise operators to exercise caution or reroute vessels where possible. Reports from the International Energy Agency highlight that while emergency reserves are still available, private inventories in key consuming regions are below five-year averages. This reduction limits the global market’s ability to absorb sudden drops in Middle Eastern crude exports or logistical disruptions.

    Structural Supply Limitations Heighten Upstream Risks

    From a macroeconomic view, Goldman Sachs warns that oil could reach 120 per barrel if alternative transportation routes fail to handle redirected trade flows. While weaker demand in major Asian markets and price elasticity may prevent extreme spikes, physical supply constraints remain the main structural driver. The report notes that inventory reductions in the second quarter have lowered global operational buffers, increasing market sensitivity. Even minor disruptions to Gulf shipping or processing infrastructure could lead to rapid price increases, impacting refining margins, transportation costs, and chemical feedstock expenses worldwide.

    Going forward, market participants are closely monitoring daily tanker movements through the Strait of Hormuz, export data from Gulf producers, and emergency policy responses by major importing countries. Institutional investors and corporate buyers are adjusting hedging strategies to reflect the expanding range of possible price outcomes. While diplomatic talks on maritime security continue behind closed doors, the markets remain highly sensitive to physical trade flows. Until transit through the Persian Gulf stabilizes at its historical capacity, global crude benchmarks will continue to incorporate a significant geopolitical risk premium driven by security concerns in the region.

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