Goldman Sachs Warns Oil Could Hit $120 Per Barrel

Goldman Sachs Group Inc. warned in a July 20 note that Brent crude prices could climb above $120 a barrel by the fourth quarter of 2026 if shipping disruptions in the Strait of Hormuz continue. While the bank maintains a base case forecast of $80 per barrel for the fourth quarter and $75 for 2027, analysts state that risks are tilted to the upside.

Market volatility is currently driven by renewed fighting between the United States and Iran, as well as threats from Houthi rebels in Yemen to blockade Saudi Arabian shipments. Low global inventories have made the market more vulnerable to supply shocks, although increased demand elasticity and a slump in Chinese imports may constrain price gains.

To hedge against persistent geopolitical shocks in Russia and the Middle East, the firm suggested a long strategy on the December 2026 to March 2027 European diesel timespread.