Goldman Sachs Warns Oil Could Hit $120 as Middle East Shipping Attacks Escalate

Q: If long-term forecasts predict falling oil prices by 2027, why are energy markets panicking over the new Persian Gulf exclusion zone today?

Markets are panicking because today’s risk is about an immediate supply shock, not the average price outlook for 2027. Goldman’s lower 2027 forecast assumes a calmer, better-supplied market later on: more output from the U.S., Brazil, Guyana, Venezuela and the UAE, plus weaker demand growth, especially from China. But that does not protect traders from a disruption now if ships cannot move safely through the Strait of Hormuz, one of the world’s most important energy chokepoints, which normally carries about a fifth of global oil and gas trade. The new Iranian “exclusion zone” matters because it threatens transit, insurance, routing and tanker availability immediately. Even if the strait is not fully closed, reduced traffic can still squeeze supply enough to move prices sharply because oil, fuel and gas inventories are already relatively tight. Goldman’s warning of Brent reaching $120 reflects that short-term vulnerability. The fear is broader than crude. Refined products and LNG are more exposed in some ways because alternatives are limited. Gulf pipelines can reroute only part of oil exports, and they do little for LNG. Qatar, a major LNG exporter, relies heavily on Hormuz, so any restriction can hit gas markets and push up freight and insurance costs quickly. That is why markets can price both ideas at once: lower average prices in 2027 and a sharp risk premium today. Long-term oversupply does not prevent a near-term spike when a critical shipping artery is under threat.

3 articles · Updated · OilPrice.com · Sep 7

Brent crude climbed above $97 a barrel on Monday and WTI topped $92 after Goldman Sachs said oil could surge to $120 if Middle East shipping disruptions broaden.
Goldman said the key risk is not just crude supply but worsening attacks on shipping, with its commodities team also favoring natural gas and refined products where supply shocks could be larger.
The latest escalation followed U.S. strikes on three Iranian oil tankers after Iran's IRGC targeted two U.S. warships with ballistic missiles.
Iran then warned of faster, heavier retaliation and said it would soon declare an exclusion zone stretching toward the Strait of Hormuz, threatening ships entering the area with sanctions.
That raises the stakes for global energy markets because any disruption around Hormuz could push oil back toward $100 and, in Goldman’s scenario, as high as $120.

Sources

Left50%

Right50%

OilPrice.com3h ago

Goldman Sachs Warns Oil Could Reach $120 Amid Middle East Shipping Attacks

Bloomberg3h ago

Goldman Flags Risk of $120 Oil If Mideast Ship Attacks Intensify - Bloomberg

NewsBytes13h ago

Goldman Sachs warns oil may hit $120 amid Hormuz tensions

5 Sources

With oil potentially hitting $120, could the looming Strait of Hormuz blockade trigger a larger crisis in global natural gas markets?

If long-term forecasts predict falling oil prices by 2027, why are energy markets panicking over the new Persian Gulf exclusion zone today?

Could Iran's unprecedented shipping sanctions and exclusion zone permanently reshape global energy logistics and accelerate alternative supply chains?