Global investment bank Goldman Sachs has warned that Brent crude oil prices could climb close to $120 per barrel by the fourth quarter if geopolitical tensions and supply disruptions in the Persian Gulf continue to intensify. The forecast highlights the growing uncertainty in global energy markets amid concerns over reduced oil shipments from one of the world's most critical exporting regions.
According to Goldman Sachs, oil flows through the Persian Gulf have dropped to below 45% of their pre-war levels, raising fears of tighter global supplies. The region accounts for a significant share of the world's crude exports, making any disruption a major concern for energy markets and importing nations.
The investment bank noted that if the supply situation deteriorates further, Brent crude could approach its war-era peak of around $120 per barrel, last seen during periods of heightened geopolitical conflict. Such a move would likely increase fuel costs worldwide and add fresh inflationary pressure to major economies.
Despite the upside risk, Goldman Sachs emphasized that this is not its primary forecast. The bank's base-case scenario still projects that Brent crude will decline to around $80 per barrel by the fourth quarter, assuming oil production recovers and supply chains stabilize over the coming months.
The difference between the optimistic and risk scenarios reflects the high level of uncertainty currently facing the global oil market. While demand remains relatively stable, geopolitical developments continue to play a dominant role in determining short-term price movements.
Energy analysts say that prolonged disruptions in the Persian Gulf could tighten supplies just as global demand remains resilient. Lower exports from the region may force importing countries to seek alternative suppliers, potentially increasing competition for available crude and driving prices higher.
Higher oil prices could have far-reaching economic consequences. Rising crude prices typically translate into increased costs for petrol, diesel, aviation fuel, and industrial production, while also pushing up transportation and logistics expenses. Central banks around the world would closely monitor such developments as they assess inflation risks and future monetary policy decisions.
Market participants are also keeping a close watch on production decisions by major oil-producing nations and any diplomatic efforts aimed at easing geopolitical tensions. Any improvement in supply conditions could support Goldman's base-case expectation of Brent returning to around $80 per barrel later this year.
Commodity markets are expected to remain highly volatile in the coming weeks, with traders reacting to developments affecting shipping routes, export volumes, and global inventory levels. Investors are also monitoring economic growth trends, which will influence future oil demand.
While Goldman Sachs' central outlook remains for Brent crude to ease to $80, the possibility of prices nearing $120 per barrel underscores the significant risks facing the energy market. As geopolitical uncertainty persists, oil prices are likely to remain one of the most closely watched indicators in the global economy.
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