Oil Prices Could Hover Above $100 On Supply Shocks From War, Goldman Sachs Reportedly Says

• The bank said that Brent prices ⁠could surpass ​its 2008 peak if supply disruption risks continue amid the war.
• It ​also added that a rise in potential risks of U.S. export curbs would likely further widen the Brent-WTI ​spread.
• Goldman also noted that supply squeezes could persist if production ‌capacity ⁠takes a hit due to the war, unless the OPEC releases spare capacity after flows start up again.

Goldman Sachs reportedly said on Thursday that oil prices could possibly stay above $100 per barrel, even as risks stay skewed to the upside in the near-team and in 2027.

According to a report from Reuters, the bank said that while its base case accounts for ​a gradual recovery in oil supply from April, with Brent crude prices potentially falling to $70 levels by the fourth-quarter (Q4) of 2026, the long-term risks stay ​elevated.

Goldman Sachs attributed the risks to the Iran war as well as uncertainty over the easing of the Strait of Hormuz. The bank also noted that supply squeezes could persist if production ‌capacity ⁠takes a hit due to the war, unless the Organization of the Petroleum Exporting Countries (OPEC) releases spare capacity after flows start up again.

War Escalation

ICE Brent Crude futures expiring in May were trading around $106.82 per barrel at the time of writing, climbing lower from the day’s high of about $119 per barrel on Thursday after Iran struck energy ​facilities in the Middle East. Iran’s attack was a response to Israeli strikes ​on its South Pars gas field earlier this week.

The U.S. and Israel’s war against Iran has spread across the Middle East, impacting one of the world’s most important shipping routes, choking off energy supplies. Goldman Sachs said, as per the report, that the energy shock linked to the Strait’s blockade is the largest in the world’s history.

Meanwhile, West Texas Intermediate crude prices were down about 1.6%, trading at $94.78 per barrel at the time of writing.

Oil Highs Likely

Goldman said that in the short term, oil prices would most likely continue to rise amid the supply constraints. However, as per the Reuters report, the bank said that Brent prices ⁠could surpass ​its 2008 peak if disruption risks continue. It ​also added that a rise in potential risks of U.S. export curbs would likely further widen the Brent-WTI ​spread.

Meanwhile, U.S. equities pared losses on Thursday as oil prices pulled back. The SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, closed 0.25% lower, the Invesco QQQ Trust ETF (QQQ) was down 0.22% at the end of the trading session, and the SPDR Dow Jones Industrial Average ETF Trust (DIA) was down 0.42%.

Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘extremely bearish’ territory.

Meanwhile, the United States Oil Fund LP (USO) was down 3.54% at close.

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