Goldman warns Brent could top $120 amid Gulf tensions

Oil prices remained volatile on Tuesday, July 21, 2026, as a prolonged military escalation between the United States and Iran continued to threaten the world's most critical oil shipping lanes, pushing U.S. gasoline prices past a politically sensitive threshold. The conflict, now in its tenth consecutive day, has driven Brent crude futures above $90 a barrel and prompted a major financial institution to warn of a potential surge to over $120 if disruptions persist.

Goldman Sachs analysts, in a note dated July 20, outlined a scenario where Brent crude could exceed $120 per barrel in the fourth quarter of 2026 and average $100 in 2027 if flows through the Strait of Hormuz remain severely disrupted. The bank stressed this was not its base case, which assumes a de-escalation of tensions and forecasts prices around $80 for the fourth quarter and $75 for next year. However, analysts noted risks are tilted to the upside, citing a decline in estimated Persian Gulf oil flows to below 45% of pre-conflict levels and threats to shipping in the Red Sea from Houthi forces in Yemen.

The immediate catalyst for the recent price spike has been a direct threat to the Strait of Hormuz, a narrow...