Goldman Sachs Raises Fourth-Quarter Oil Price Forecast to as High as $90; Warns Crude Production Capacity Could Be Permanently Crippled

The war in the Middle East has dragged on, severely disrupting global oil supply. Reports say that in its latest report, Goldman Sachs raised its forecast for international crude oil prices for Q4, expecting Brent crude to reach $90 per barrel. Despite the extreme risks facing the crude oil market, major U.S. stock indexes still reached record highs against the odds, supported by strong corporate earnings reports.

Brent crude spot breaks $106

As peace talks between the United States and Iran have stalled, U.S. authorities have recently carried out their own naval blockade operations in the Strait of Hormuz, forming a dual blockade against Iran. Since April 17, international oil prices have surged by more than 20%. On Monday, Brent crude rose by more than 1% and broke above $106 per barrel. Although the current price is still below the early-March peak near $120, the overall increase since the conflict erupted in late February has been nearly 50%, bringing violent shocks to the global crude oil market.

Goldman Sachs lifts its Q4 oil price forecast; normal exports may be delayed until the end of June

To account for the prolonged interruption to Middle East energy production, Goldman analysts raised their Q4 Brent crude price forecast from $80 to $90, and also lifted their West Texas Intermediate (WTI) forecast from $75 to $83. The analysts noted that Persian Gulf crude oil exports are expected to return to normal only by the end of June—later than the previously estimated mid-May timeline—also implying a slower pace of production recovery.

“The scar effect” will cut crude oil production capacity by 500,000 barrels per day

Disruptions in the supply chain are placing unprecedented pressure on crude oil inventories. The Financial Times said Goldman estimates a daily loss of crude oil production capacity in the Persian Gulf region of up to 145 million barrels per day, forcing global crude oil inventories in April to shrink at a record pace of 11 million to 12 million barrels per day. This will quickly flip the global crude oil market from an oversupply of 1.8 million barrels per day in 2025 to a severe shortage of 9.6 million barrels per day in Q2 2026. In addition, Goldman warned that this crisis will create a long-term “scarring” effect on Persian Gulf capacity, projecting a permanent loss of about 500,000 barrels of daily production capacity, mainly concentrated in Iraq.

The energy crisis raises overall macroeconomic risk; U.S. stocks hit fresh highs supported by earnings

The Goldman team pointed out that the current overall macroeconomic risks are far higher than what simple crude oil supply-and-demand models suggest. The real risks of rising oil prices, unusually high refinery product prices, potential product shortages, and the unprecedented scale of this disruption could all push global inflation higher and hinder economic growth. However, in stark contrast to the volatility in the crude oil market, global stock markets have remained resilient. Benefiting from strong corporate earnings reports, the S&P 500 and the Nasdaq Composite both posted record closing highs last Friday, defying the trend.

This article, “Goldman Sachs raises its Q4 oil price target to over $90! Warns that crude oil production capacity could be permanently damaged,” first appeared on Chain News ABMedia.