Goldman Sachs warns oil could hit $120 if Hormuz closure persists

International investment bank Goldman Sachs has warned that Brent crude prices could rise to $120 per barrel if the Strait of Hormuz remains closed due to the ongoing dispute between the United States and Iran.

According to cryptobriefing.com, such a scenario could trigger the largest supply disruption in oil market history, with a potential systemic supply shock affecting between 15 and 20 million barrels per day.

Currently, Brent crude is trading at around $86.50 per barrel, while West Texas Intermediate (WTI) stands at approximately $80.66 per barrel. The warning comes amid heightened geopolitical tensions, as initial talks between the US and Iran have reportedly begun to reopen the strait.

Market impact of the warning

The same source noted that market activity reflects growing expectations for higher WTI prices, with an increased likelihood of reaching $90 per barrel. The Goldman Sachs warning appears to be influencing market sentiment, as concerns mount over a prolonged closure of the Strait of Hormuz.

At present, market pricing suggests the probability of WTI reaching $120 per barrel by July remains low, but the warning highlights significant risks should the crisis escalate.

Geopolitical developments closely watched

Markets are closely monitoring any developments related to the Strait of Hormuz, including official statements from Iran's Ministry of Shipping and any potential geopolitical escalation. Progress in US-Iran negotiations and OPEC+ actions are also seen as critical factors for future market forecasts.

If the closure persists or diplomatic efforts fail, the likelihood of a significant oil price surge could increase further.