Finance
Goldman Sachs Flags Upside Risks to Oil Prices in Near Term and Into 2027
Published by Global Banking & Finance Review®
Posted on March 19, 2026
2 min readLast updated: March 19, 2026
Quick Summary
Goldman Sachs warns oil prices face upside risks near‑term and into 2027 amid escalating Middle East conflict, with Brent briefly topping $119. Although recovery is expected into late 2026, prolonged disruption could keep prices above $100 or even revisit 2008 highs.
Goldman Sachs Flags Long-Term Upside Risks to Oil Prices Amid Supply Shocks
Goldman Sachs Analysis of Oil Price Risks and Market Impact
Near-Term and Long-Term Oil Price Risks
March 19 (Reuters) - Goldman Sachs said on Thursday that risks to oil prices remain skewed to the upside both in the near term and into 2027.
The bank added that the persistence of several past large supply shocks highlights the possibility that oil prices could remain above $100 per barrel.
Recent Market Events and Supply Shocks
Escalation in the Middle East
Benchmark Brent crude surged above $119 a barrel on Thursday after Iran attacked energy facilities across the Middle East in response to Israel's strike on its South Pars gas field, marking a sharp escalation in a war that now in its third week. The war has triggered widespread shut-ins across Gulf states.
Goldman Sachs Base Case and Outlook
Goldman Sachs said its base case assumes a gradual recovery in oil flows from April, with Brent easing to the $70s by the fourth quarter of 2026, but warned that risks to the long-term outlook remain elevated due to the Iran war and uncertainty over the reopening of the Strait of Hormuz.
Potential for Prolonged Supply Constraints
The bank said supply could remain constrained for longer if production capacity is damaged, though output could rise if OPEC deploys spare capacity once flows resume.
Historical Perspective on Supply Disruptions
Goldman said the shock linked to Hormuz would be the largest on record and analyzed the persistence of production losses across the five biggest supply disruptions of the past 50 years.
Risks to Long-Term Supply and Price Outlook
The banks base case assumes oil production normalizes within four weeks of a full reopening, but flagged meaningful downside risks to long-term supply, particularly from Iran and offshore production.
Goldman Sachs said in the short term oil prices are likely to keep rising while flows through the Strait of Hormuz remain constrained, adding that Brent could surpass its 2008 peak if disruption risks persist.
It also said any increase in perceived risks of U.S. export curbs could further widen the Brent-WTI spread.
Reporting Credits
(Reporting by Anushree Mukherjee and Anjana Anil in Bengaluru; Editing by Nick Zieminski)
Key Takeaways
- •Goldman Sachs highlights heightened upside risk to oil prices due to the Iran‑Israel conflict and Strait of Hormuz disruption, with Brent crude briefly topping $119 on March 19, 2026 (apnews.com)
- •The bank’s base‐case assumes gradual oil flow recovery from April, projecting Brent to ease to the $70s by Q4 2026, and average around $70 in 2027—but warns that supply shocks could trigger prolonged high prices or widen Brent‑WTI spreads (investing.com)
- •Goldman considers the Strait of Hormuz shock potentially the largest ever; while short‑term gains loom if disruptions persist, long‑term normalization within four weeks is assumed—but risks remain elevated if capacity damage or geopolitics constrain supply (investing.com)
References
Frequently Asked Questions about Goldman Sachs flags upside risks to oil prices in near term and into 2027
1What is Goldman Sachs' outlook for oil prices through 2027?
Goldman Sachs sees risks to oil prices remaining skewed to the upside in the near term and into 2027 due to ongoing supply shocks and geopolitical tensions.
2What recent events have affected Brent crude oil prices?
Brent crude surged after Iran attacked Middle East energy facilities in response to Israel's strike, triggering supply disruptions across Gulf states.
3How might the Iran war and Strait of Hormuz impact oil supply?
Goldman Sachs warns that prolonged disruptions or damage to production capacity around the Strait of Hormuz could keep oil supply constrained for longer, driving prices higher.
4Does Goldman Sachs expect oil production to normalize soon?
Goldman's base case assumes oil production normalizes within four weeks of a full reopening, but notes significant downside risks if disruptions persist.
5Could Brent crude prices surpass previous records?
Yes, Goldman Sachs notes Brent could surpass its 2008 peak if disruption risks in the Strait of Hormuz and broader region persist.
