Goldman Sachs is warning that oil prices could surge above $120 per barrel in the coming months if the conflict between the United States and Iran continues and shipping disruptions persist in the Strait of Hormuz.

According to the investment bank, Brent crude could climb above $120 during the next quarter if the region remains unstable. In a prolonged disruption scenario, prices could average around $100 per barrel throughout 2027, significantly higher than current market expectations.

Oil prices briefly topped $90 per barrel on Monday before retreating as investors weighed the prospects of further escalation versus a ceasefire. The renewed tensions follow the collapse of the June ceasefire between Washington and Tehran, while Iran-backed Houthi rebels have also announced a maritime blockade targeting Saudi Arabia, raising additional concerns about global energy supplies.

Energy analysts say markets may have been overly optimistic about a quick return to normal shipping through the Strait of Hormuz. If the conflict drags on, they warn crude prices could soon test the $100 mark before climbing even higher.

The impact would likely extend well beyond the energy sector. BlackRock estimates that a sustained surge in oil prices could add roughly 0.8 percentage points to global inflation, with Europe and Asia expected to be hit hardest because of their dependence on imported energy.

Attention is now focused on a proposed 10-day ceasefire between the United States and Iran aimed at restoring the June agreement. Analysts warn that if negotiations fail, shipping through the Strait of Hormuz could remain restricted while Houthi attacks in the Red Sea expand, increasing the risk of another sharp spike in global oil prices.

(YWN World Headquarters – NYC)