Oil may jump to $110 if Strait of Hormuz closed: Goldman Sachs

Goldman Sachs highlighted mounting risks to global energy supplies amid growing concerns over potential disruptions in the Strait of Hormuz—a development that could trigger a sharp rise in oil and natural gas prices.

In a recent note, the bank stated that while developments in the Middle East remain volatile, it believes the economic incentives—particularly in the US and China—to prevent a sustained and severe disruption in the Strait of Hormuz are strong, Reuters reported.

The financial institution projected that Brent crude prices could surge to $110 per barrel if oil flows through the vital waterway were halved for one month and remained about 10% lower over the following 11 months. It also forecast an average Brent price of approximately $95 per barrel in Q4 2025.

Goldman Sachs noted that current market expectations reflect a 52% probability that Iran will close the Strait of Hormuz at some point in 2025.

The bank also outlined another scenario in which Iranian oil exports drop by 1.75 million barrels per day for six months, followed by a gradual recovery. Under this scenario, Brent prices could rise to $90 per barrel before retreating to around $60 by 2026.

In a sub-scenario, where Iranian oil production remains persistently low, Brent could still reach $90 per barrel but may stabilize between $70 and $80 in 2026 due to reduced inventories and limited global spare production capacity.