Investment Banks Predict Oil Prices Return to Three-Digit Era
Middle East tensions are sending oil prices soaring—Brent is above $93, and banks warn of $100+ barrels! Will Hormuz disruptions push prices to $120 (Barclays) or even $150 in extreme cases?
How will this impact global inflation and energy stocks?
Are you bullish on oil majors, or bracing for a demand slowdown? Share your take on the oil market’s next move below!
As geopolitical tensions in the Middle East continue to escalate, the risk of shipping disruptions in the Strait of Hormuz is driving a sharp shift in crude oil market sentiment. By the close of trading on March 6, Brent crude futures had surged to $93.60 per barrel, while U.S. West Texas Intermediate (WTI) crude settled at $91.62 per barrel—marking the largest weekly gain since the 2022 Russia-Ukraine conflict. Faced with mounting supply threats, several top investment banks have successively raised their price forecasts, warning that upward risks to oil prices are accumulating rapidly.
Goldman Sachs: Brent Could Return to $100 if Hormuz Disruptions Persist
$WTI Crude Oil - main 2604(CLmain)$
Analysts at Goldman Sachs warned in a new report released this week that Brent crude could soar to $100 per barrel if exports through the Strait of Hormuz remain disrupted for an extended period. The bank modeled multiple scenarios: its baseline case assumes the current 15% of normal export levels persists for another five days, followed by a gradual recovery over one month, corresponding to a second-quarter Brent average of $76 per barrel. However, if the low-flow state continues for another five weeks, the market will face a severe supply crunch, potentially pushing oil prices above the $100 mark—a level not seen since the outbreak of the Russia-Ukraine conflict in 2022. Goldman Sachs emphasized that while this extreme scenario is not its baseline expectation, it highlights how geopolitical factors can rapidly upend supply-demand balances. The report stressed that the market has not fully priced in supply disruptions, and sentiment could shift drastically if the conflict spreads to oil production facilities.
Barclays: Brent Could Test $120 if Conflict Drags On for Weeks
In a more aggressive assessment than Goldman Sachs, Barclays explicitly stated in a report released on Friday that Brent crude could test $120 per barrel if the Middle East conflict persists for several more weeks. Barclays’ research team noted: "These numbers may seem high amid current market pessimism, but we reiterate that both the underlying fundamentals and risk intensity exceed those during the Russia-Ukraine conflict." The report pointed out that as tensions between the U.S.-Israel alliance and Iran escalate, the Strait of Hormuz has effectively been "closed." Since the conflict erupted, crude oil stranded on tankers in the Middle East Gulf has increased by 85 million barrels. More critically, production disruptions have already emerged in Kuwait and Iraq, with potential spread to the UAE and Saudi Arabia. Barclays also outlined an extreme price path: in a 10% tail-risk scenario where the situation deteriorates further, Brent crude could reach $150 per barrel by the end of the month. This judgment is based on the narrowing of diplomatic solutions following U.S. President Trump’s Friday ultimatum to Iran demanding "unconditional surrender."
Market Logic Reshaped: From Supply Glut to Geopolitical Premium
The backdrop to this oil price rally is that just weeks ago, the market was pricing in a supply surplus for the year. Goldman Sachs previously predicted that without major supply shocks, the global market would face a surplus of 2.3 million barrels per day in 2026, with Brent averaging just $60 per barrel for the full year. However, the sudden geopolitical shift has rapidly reshaped this logic. The Strait of Hormuz handles approximately one-fifth of the world’s oil production and liquefied natural gas (LNG) shipments. After Iran threatened to open fire on passing vessels, shipping activities descended into chaos. Despite restrained U.S. shale oil production and OPEC+’s continued adherence to production cut discipline, marginal disruptions on the supply side have been sufficient to drive up the price anchor.
For consumers, rising oil prices mean a resurgence of energy costs and inflationary pressures; for Middle Eastern oil-producing nations and U.S. shale oil producers, they represent windfall gains. Yet the market’s primary concern is: if the conflict fails to de-escalate soon, the current geopolitical premium may only be the beginning.
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