A maritime corridor most investors rarely think about is once again dictating the direction of global markets.
West Texas Intermediate light crude has surged 30% year-to-date to roughly $75 per barrel as disruptions through the Strait of Hormuz — the narrow shipping passage responsible for roughly a fifth of global oil trade — have sharply reduced Middle Eastern exports.
Now analysts at Goldman Sachs warn the market may still be underestimating how quickly the shock could escalate.
In a Wednesday note, Goldman Sachs analyst Daan Struyven warned that continued disruptions in the Strait of Hormuz could send oil prices sharply higher, potentially pushing Brent crude to $100 per barrel if the situation drags on.
The implications stretch far beyond a temporary price spike.
Storage Bottlenecks May Force Production Cuts
Goldman's revised outlook rests on a specific assumption: that oil exports through the Strait of Hormuz remain severely constrained in the immediate term before gradually recovering.
Flows through the strait are currently estimated at roughly 15% of normal levels, according to the bank's analysis.
Under that scenario, Goldman estimates the disruption could generate about 200 million barrels of lost Middle Eastern production during March alone.
The reason lies in a constraint rarely discussed in macro commentary: storage.
“We assume that 5 additional days of very low (15% of normal) Strait of Hormuz exports followed by a gradual recovery over 28 days will lead in March to large OECD inventories declines and 200mb of estimated Middle Eastern crude production losses as storage approaches congestion,” Struyven said.
Once export routes close, crude rapidly accumulates at production sites. When storage approaches capacity, producers are forced to shut wells.
Goldman estimates the region has roughly 300 million barrels of spare landed storage capacity, equivalent to just 18–23 days of exports under a full closure scenario.
Production cuts therefore begin far earlier than markets might expect. That flips the script.
Iraq is already cutting output by nearly 1.5 million barrels per day due to storage constraints.
Goldman estimates production losses could peak at just over 7 million barrels per day before gradually recovering once shipping flows normalize.
Goldman Raises Crude Price Forecast
Goldman now expects Brent crude to average $76 per barrel in the second quarter of 2026, up from a previous forecast of $66.
Its WTI outlook rises to $71, from $62 previously.
The bank believes prices will likely trade in the mid-$80s during March as the market balances signs of partial shipping recovery against evidence of mounting production losses.
Beyond the near term, Goldman expects the shock to gradually fade.
The bank forecasts Brent declining to roughly $66 by the fourth quarter of 2026, as Hormuz flows normalize and global inventories begin rebuilding.
Two forces would drive that decline.
First, the gradual disappearance of what Goldman estimates as a $13 geopolitical risk premium. And second, a modest fall in the underlying fair value as inventories rise
But the balance of risks remains skewed higher.
The $100 Oil Scenario
Goldman's most striking warning lies in its alternative scenario.
If disruptions in the Strait of Hormuz persist for another five weeks, analysts estimate Brent prices could climb toward $100 per barrel.
At that level, the oil market typically enters a different phase: demand destruction.
Prices begin rising quickly enough to suppress consumption, preventing inventories from falling to critically low levels.
Goldman defines that threshold as roughly 2.6 billion barrels of OECD commercial stocks, the trough reached during the 2022 energy shock.
Beyond that point, market dynamics can become nonlinear.
Longer disruptions may delay production restarts and amplify supply losses, pushing prices higher than traditional models would suggest.
Energy's Return As Market Leadership
If the disruption persists, the broader implication may be a renewed leadership shift inside equity markets.
Energy has spent much of the past decade overshadowed by technology and growth sectors.
But structural supply constraints — from underinvestment in upstream production to geopolitical risk — have gradually tightened the global oil system.
Thus far in 2026, the Energy Select Sector SPDR Fund (NYSE:XLE) has continued to outperform the broader market, rising 26%.
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