Global oil prices have surged after escalating conflict in the Middle East disrupted traffic through the Strait of Hormuz, a key route that carries roughly 20% of the world’s oil and LNG exports.
- Goldman Sachs expects the impact to be an additional $12 per barrel if the entire estimated spare pipeline capacity of four million barrels per day is fully used.
- The firm raised its Q2 average price forecast for Brent crude by $10 a barrel and West Texas Intermediate crude by $9 a barrel, according to a Reuters report.
- If LNG flows are fully halted for a month, Goldman Sachs expects Dutch TTF gas prices could climb toward €74 MWh.
Global oil prices have surged in recent sessions after escalating tensions between the U.S., Israel, and Iran led to the closure of the Strait of Hormuz — a critical shipping lane that carries nearly 20% of the world’s oil and LNG — with maritime traffic suspended for a fifth consecutive day.
Spot Brent Crude prices have jumped over 16% over the past three sessions and are currently at their highest levels since July 2024. At the time of writing, spot prices gained 1% to $83.4 a barrel.
Goldman Sachs expects oil prices to climb sharply if the Strait remains closed, estimating that crude could rise by about $15 per barrel if shipments are disrupted for a full month.
Price Impact Scenarios Based On Hormuz Closure
If the entire estimated spare pipeline capacity of four million barrels per day is fully used, Goldman Sachs expects the impact to ease to around $12 per barrel. Prices could rise by about $10 if pipeline capacity is utilized and global strategic petroleum reserves are released at 2 million barrels per day for one month, the firm stated on Tuesday.
A partial disruption would have a smaller effect, with a 50% closure adding roughly $4 per barrel and a 25% disruption increasing prices by about $1. The bank also estimates that traders are demanding roughly $14 more per barrel than before the conflict to account for elevated risks — a premium that reflects the expected impact of a full four-week disruption of flows through the Strait of Hormuz.
According to a Reuters report on Wednesday, Goldman Sachs raised its second-quarter 2026 average price forecast for Brent crude by $10 to $76 per barrel and increased its West Texas Intermediate (WTI) crude outlook by $9 to $71.
The firm said the higher estimates reflect expectations that reduced oil flows through the Strait of Hormuz will sharply lower Organisation for Economic Co-operation and Development (OECD) inventories and curb Middle East production in March.
European Gas Prices Could Surge To €100 MWh
Analysts also warned that European gas and global LNG prices could rise sharply if the conflict escalates. The biggest risk would be a disruption to the roughly 80 million tons per year of LNG — about 19% of global supply — that normally passes through the Strait of Hormuz.
If LNG flows are fully halted for one month, the firm estimates Dutch TTF gas prices could climb toward €74 per megawatt-hour (MWh). A disruption lasting longer than two months could push European gas prices above €100 MWh.
Dutch TTF Natural Gas Futures for April 2026 deliveries traded up around 3% to €55.9 MWh, having surged nearly 74% since Friday.
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