NEW YORK — Goldman Sachs warned Tuesday that Brent crude oil could climb above $120 per barrel if disruptions to shipping through the Strait of Hormuz persist, underscoring how one of the world’s most critical energy chokepoints continues to pose a major risk to global markets despite recent periods of price stability. The investment bank said its base-case outlook still assumes tensions eventually ease, but a prolonged interruption to Gulf oil exports would significantly tighten global supplies and drive prices sharply higher. 

The warning comes as the Strait of Hormuz remains at the center of heightened geopolitical tensions. Roughly one-fifth of the world’s seaborne crude oil normally passes through the narrow waterway connecting the Persian Gulf to international markets, making any sustained disruption an immediate concern for refiners, shipping companies, airlines, manufacturers and consumers worldwide.

Goldman said its central forecast continues to call for lower oil prices if regional tensions gradually subside and export flows normalize. However, the firm emphasized that a prolonged reduction in Gulf exports would materially alter the global supply-demand balance, creating the potential for a rapid spike in crude prices as inventories tighten and buyers compete for available barrels. 

The outlook highlights the growing disconnect between current oil prices and the risks embedded in the market. Despite months of conflict and repeated threats to shipping routes, crude prices have remained below the worst-case forecasts issued earlier this year, supported by resilient U.S. production, strategic stockpile releases, diversified export routes and softer demand growth from major importing nations. Those factors have helped cushion the market from the full impact of Middle East disruptions. 

For American consumers, any sustained move toward $120 Brent would likely translate into higher gasoline and diesel prices, increased transportation costs and renewed inflationary pressure across much of the economy. Energy represents a major input cost for manufacturing, agriculture, aviation, trucking and retail distribution, meaning higher crude prices often ripple through supply chains before ultimately reaching consumers.

Businesses are also closely monitoring shipping insurance costs and freight rates, both of which have risen as security concerns increase around Gulf shipping lanes. Even without a complete closure of Hormuz, higher transportation expenses can add to the cost of delivering oil and refined products to global markets.

Investors are expected to remain focused on military developments, shipping activity through the Strait of Hormuz, OPEC+ production decisions and diplomatic efforts that could either ease or escalate tensions in the region. Any indication that export flows are improving could quickly reduce the geopolitical risk premium built into crude prices, while additional disruptions could send energy markets sharply higher.

For now, Goldman continues to view the $120-plus scenario as a downside risk rather than its primary forecast, but the bank said the possibility underscores how sensitive global energy markets remain to prolonged supply disruptions in one of the world’s most strategically important oil corridors. 

JBizNews Desk | New York

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