Wealth Management Firm Warns: Oil Could Top $120 if Persian Gulf Supply Disruption Persists

Goldman Sachs raised its oil price forecast and said crude could break above $120 a barrel if Persian Gulf supply disruptions persist.

On Monday, a team led by Goldman Sachs analyst Daan Struyven raised its oil price forecast, marking a sharp reversal from its stance three months ago. According to MarketWatch, the analysts noted that if average Gulf production in 2027 remains 4 million barrels per day below pre-war levels, Brent crude could exceed $120 a barrel.

The analysts raised their year-end oil price forecast to $90 a barrel from $80, and lifted their 2027 average price forecast to $80 from $75. The shift follows a period of summer optimism, when the firm had hoped the conflict would end quickly and Middle East supply would normalize.

The firm argued that despite heightened tensions in the Persian Gulf, the move still represents a relatively moderate oil price increase, citing two key reasons. First, analysts pointed out that commercial onshore inventories in OECD economies have barely declined since the war began. Second, they expect supply to keep adapting through unrecorded flows via the Strait of Hormuz and rerouted pipelines. The analysts added that alarmist oil price forecasts are likely overstated, as global inventories remain above minimum operating levels.

Goldman's Forecast Contrasts with Bessent's View

Goldman Sachs's forecast stands in stark contrast to that of Treasury Secretary Scott Bessent, who has predicted that oil prices would fall sharply to between $40 and $50 a barrel once the Iran conflict is resolved, due to a surge in supply.

Bessent said that as Gulf states develop alternative pipeline routes, the Strait of Hormuz's importance to global oil trade could decline, limiting Iran's ability to disrupt supply. He described the current energy shock as temporary, called the U.S. an "energy superpower," and pointed to strong job and wage growth.

What It Means for U.S. Consumers

Meanwhile, President Donald Trump has predicted oil prices would "plunge," with national gasoline prices falling from $4.15 per gallon to $3, and eventually to $2. According to AAA data, U.S. gasoline prices hit a record high over the Labor Day weekend, with the national average reaching $4.15 per gallon, above roughly $3.20 a year earlier and surpassing the previous record of $3.82 set in 2012.

Brown University's Cost of War project estimates that the conflict has cost U.S. consumers more than $100 billion in higher energy prices, with households paying over $760 on average.

As of press time, Brent crude futures for October delivery were up 2.09% at $98.29 a barrel, while WTI crude futures for October delivery rose 2.11% to $93.41 a barrel.