New Delhi, March 23: Goldman Sachs, one of the world’s leading investment banks, has increased its oil price forecast for 2026 by more than 10%. This adjustment is primarily due to the disruption in oil supply caused by the closure of the Strait of Hormuz, which is under Iranian control.
Analyst Dan Struvein from Goldman Sachs stated that the average price of Brent crude futures is expected to be $85 per barrel in 2026, up from the previous estimate of $77 per barrel, marking a 10.38% increase.
Similarly, the forecast for WTI crude is now an average of $79 per barrel, which is a 9.72% rise from the earlier estimate of $72 per barrel.
This revision is based on the expectation that oil flow through the Strait of Hormuz will remain at only 5% of its normal capacity for the next six weeks, after which it is anticipated to gradually return to normal levels over the following month.
The ongoing conflict between the United States, Israel, and Iran has caused significant turmoil in the oil markets, now entering its fourth week with no resolution in sight. President Donald Trump issued a two-day ultimatum over the weekend for Tehran to reopen the critical shipping route, warning of potential attacks on its energy infrastructure otherwise. In response, Iran has threatened retaliatory action.
According to Goldman Sachs, “Unprecedented disruptions may compel policymakers and investors to reassess structural vulnerabilities in global energy supply, particularly the heavy concentration of production and spare capacity in the Middle East.”
Despite challenging supply conditions in Asia, crude oil inventories in OECD countries, including the U.S. and Europe, continue to rise, indicating that global supply was exceeding demand even before the conflict began.
The bank also projected that losses in crude oil production in the Middle East could rise from the current 11 million barrels per day to a peak of 17 million barrels per day.
Once normal operations resume, a complete recovery is expected within four weeks, with cumulative losses potentially exceeding 800 million barrels.
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My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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