Bloomberg

Tuesday, July 21, 2026 11:33 | 2 minutes read

Brent crude prices are expected to exceed $120 per barrel by the fourth quarter of the year if navigation disruptions through the Strait of Hormuz persist, according to Goldman Sachs Group. This scenario is not the baseline expectation for markets undergoing wide fluctuations.

Analysts, including Dan Struyven, said in a note issued on July 20 that "the escalation of tensions in the Middle East and the decline of estimated Arabian Gulf flows to less than 45% of pre-war levels have pushed oil prices higher again."

Goldman Sachs currently expects Brent crude to average $80 per barrel in the fourth quarter, before falling to $75 over the next year, based on the assumption that tensions in the Middle East ease. However, analysts see the risks surrounding these estimates as "skewed to the upside" due to shipping disruptions through Hormuz and the potential for them to extend to the Red Sea.

Global energy markets have been disrupted this month, with Brent crude rising back above $91 per barrel, amid renewed conflict between the United States and Iran, and threats from Tehran-backed Houthis in Yemen to disrupt shipping in the Red Sea. Oil flows through the Red Sea have played a pivotal role in delivering disrupted Arabian Gulf crude shipments to consumers.

Mon, 20 2026

Analysts said that the decline in global inventories during the second quarter made the oil market more vulnerable to supply shocks, but a drop in Chinese imports, along with increased demand flexibility, may limit expected gains.

For investors seeking to hedge against ongoing geopolitical shocks from the Middle East and Russia, Goldman Sachs suggested a strategy of taking a long position on the spread between European diesel contracts for delivery in December 2026 and March 2027.

Disruptions Threaten Diesel Market

Analysts pointed out that diesel markets were suffering from severe shortages before the war, while Ukraine continued to target Russian refineries, along with additional risks to supply including hurricanes, summer heatwaves, and deferred maintenance of facilities.

Tue, 14 2026

Brent crude futures were at $88.65 per barrel in latest trading, after hitting a peak of $126 per barrel in late April during the first phase of the US-Iran conflict.

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