'Upside Oil Price Risk' Remains As Goldman's Hormuz Price Scenarios Suggest 'Low Flows For Longer'

Despite an apparent 'all clear' from President Trump yesterday afternoon - which prompted a manic collapse in crude prices (but has seen no follow through overnight)...

...Goldman's 'Oil Team', led by Daan Struyven, still sees upside risks to crude prices.

Last week Goldman flagged upside risks to their oil price forecast because of risks of a delay to our assumption of a gradual 28-day normalization in Strait of Hormuz (SoH) flows from this week onwards.

Risks Skew to Low Flows for Longer

Because the SoH flows data are noisy (Exhibit 1) and the broader situation remains fluid, Struyven has not changed their oil price forecast (Brent/WTI at $66/62 in 2026Q4 and $70/66 in 2027) but estimate the large upside risks in longer disruption scenarios, as he details below...

Exhibit 1: The Risks Around Our Assumption of a Gradual 28-Day Normalization in Strait of Hormuz (SoH) Flows From This Week Onwards Skew Towards a Delay (Although Noisy and Preliminary Data Subject to Revisions Showed a Pickup in March 9 Vessel Counts)

Two models.

Using two stylized models, we distinguish between the impact of the Hormuz shock on oil prices:

1) after uncertainty about the shock has abated and

2) during the shock when the risk premium reflects high uncertainty about disruption length.

Price Scenarios After the Shock (No Uncertainty)

We estimate the fair value of crude prices based on the cumulative hits to Persian Gulf crude production and to commercial oil inventories after accounting for policy responses (e.g. SPRs) and assuming a Brent fair value in the low $60s without the Iran shock.

Exhibit 2 shows 2026Q4 fair value estimates for Brent/WTI (forwards at $74/70) of:

• $76/72 in a risk scenario where Persian Gulf exports are down 15mb/d for 30 days

• $93/89 in a 60-days risk scenario with a 15mb/d exports hit

Exhibit 2: With No Uncertainty on the Length of the Conflict, the Fair Value For Brent/WTI Could Still Be $66/bbl in 2026Q4 if SoH Flows Start Recovering Gradually This Week

Price Scenarios During the Shock (With High Uncertainty)

We estimate potential market prices in March if the market were to require demand destruction to hedge against inventories falling below critical levels in a risk scenario (which differs from the market's base case) with longer disruptions (e.g. 120 days).

Exhibit 5: We Estimate Non-Linear Demand Destruction as a Function of Oil Prices Based on the 2022 Oil Market Shock and Our Own Modeling

Exhibit 3: With High Uncertainty About the Duration of the Disruption, the Market May Require Offsetting Demand Disruptions and Lift Temporarily Prices Above $100 During the Disruption

The analysis supports our view that daily oil prices in March would likely exceed the 2008 and 2022 peak if risks from very low SoH flows throughout March (which would then be the largest monthly oil supply shock on record) were to lead the market to price demand destruction very quickly.

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