Goldman Sachs Group has again raised its oil price projections due to extreme inventory drawdowns caused by prolonged shipping disruptions in the Strait of Hormuz.
Analysts including Daan Struyven and Yulia Zhestkova Grigsby noted in an April 27 research report that the average Brent crude price forecast for the fourth quarter has been increased from $80 per barrel to $90 per barrel. This level is nearly $30 per barrel higher than before the Hormuz crisis began and marks the second consecutive upward revision.
The team stated, "Current daily crude production capacity in the Persian Gulf has fallen sharply by 14.5 million barrels, leading to global crude inventories being drawn down at a record pace of 11 to 12 million barrels per day in April. Such extreme inventory depletion cannot be sustained long-term. If supply disruptions persist, global demand could experience more severe contraction."
The Iran-U.S. conflict has fundamentally disrupted the global oil market, with mutual blockades nearly halting shipping through the critical Strait of Hormuz. Millions of barrels of daily crude supply from the Gulf region have been interrupted. Since the conflict escalated in late February, Brent crude prices have risen by nearly 50%, exacerbating global inflationary pressures and hampering economic growth.
Analysts have adjusted their baseline assumptions: The timeline for normalized Gulf crude exports has been delayed from mid-May to the end of June, with a slower recovery pace expected for Gulf oil producers. "The scale of this energy shock is unprecedented, compounded by upside risks to oil prices, abnormally high refined product prices, and persistent supply shortages. Overall economic downside risks far exceed those projected by standard oil benchmark models."
According to Goldman Sachs, the global crude supply-demand gap reached 9.6 million barrels per day in the second quarter of this year, compared to a surplus during the same period last year.
A research team led by Martijn Rats at Morgan Stanley indicated that the Strait of Hormuz blockade has reduced daily crude exports from the Persian Gulf by 14.2 million barrels. Global crude inventories are declining by 4.8 million barrels per day, with weakening demand only partially offsetting the supply gap.
Morgan Stanley assessed the current oil market situation: "Since the Hormuz blockade, the oil market has been caught in a contradiction: shipping is largely halted but not entirely suspended, and markets are anticipating a reopening even as conditions show no improvement. The scale of this supply shock is immense, data remains incomplete, and recovery is highly dependent on external factors."
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