Goldman Sachs: "Oil Prices Could Reach $120 if Blockade Continues Through July"

If Normalization Occurs by June, Average Price Expected at $90
Still $10 Higher Than Previous Forecast
JP Morgan Expects Exports to Normalize by End of May

With peace negotiations between the United States and Iran stalled, there are forecasts that if the blockade of the Strait of Hormuz continues until July, international oil prices in the second half of this year could rise to as high as $120 per barrel.

According to the Financial Times (FT) on the 27th (local time), Goldman Sachs predicted that if crude oil exports from the Middle East return to normal by the end of June, Brent crude oil will trade at an average of $90 per barrel in the fourth quarter of this year. This is $10 higher than the previous forecast of $80 per barrel.

During the same period, West Texas Intermediate (WTI) crude oil is expected to trade at around $83 per barrel, which is about $8 higher than the previous forecast of $75 per barrel.

However, if crude oil exports from the Middle East do not normalize by the end of July, and oil production capacity in the Gulf of Mexico continues to decrease by 2.5 million barrels per day, fourth-quarter oil prices could reach an average of $120 per barrel, according to the analysis.

According to PetroNet's international oil price information, after Iran blocked the Strait of Hormuz and tensions peaked on March 31, Brent crude oil recorded its highest price at $118.35 per barrel. WTI surged to $112.95 per barrel on April 7.

International oil prices, which had fallen below $100, are once again on the rise as peace negotiations between the United States and Iran have stalled. A second round of talks was expected to take place over the past weekend, but U.S. President Donald Trump canceled the delegation's trip to Pakistan. The Iranian Foreign Ministry also officially stated that there were no scheduled talks with the United States.

International oil prices are once again on the rise. On the afternoon of the same day at the ICE Futures Exchange, Brent crude for June delivery was trading at $109.14 per barrel, up 3.81% from the previous session. At the New York Mercantile Exchange, WTI for June delivery was trading at $96.78 per barrel, up 2.51% from the previous session.

Goldman Sachs analysts noted in their report, "Market expectations for the reopening of the Strait of Hormuz have reduced the risk premium and led to the release of reserves, which appears to be keeping current prices below the highs seen at the end of March."

Goldman Sachs warned that the economic impact of rising oil prices could be greater than what is reflected by the price level alone. The Financial Times reported that, especially considering the possibility of an energy product shortage and the unprecedented scale of the shock, the impact on the real economy could be even greater.

However, Morgan Stanley expects crude oil exports through the Strait of Hormuz to return to normal by the end of May. Morgan Stanley forecasts Brent crude prices at $110 per barrel in the second quarter and expects them to gradually decline toward $80 per barrel by 2027.

This content was produced with the assistance of AI translation services.