Goldman Sachs Predicts $120 Iran War Oil Price as Brent Already Blew Through Its $80 Base Case

• Iran war oil price heads toward Goldman’s $120 target as Brent crude price surges to $96, blowing past the Goldman Sachs oil prediction of $80 base case and lifting the 2026 oil price forecast after attacks near the Bab el-Mandeb oil route
• Houthis attacked two Saudi tankers at Bab el-Mandeb today, closing the only working bypass around a shut Hormuz for the first time
• Goldman’s own data shows the average production hit across the 5 biggest oil shocks of the last 50 years was 42%, appearing years not weeks after the initial shock

The Iran war price outlook has now heavily changed as its conflict with the US continues to intensify. As a result, Brent crude oil has now surged past $96, well above Goldman Sachs’ $80 base case forecast for Q4 2026. The latest oil price rally is the result of the recent escalation between Iran and the US, with the Iran-backed Houthis attacking two Saudi tankers near the Bab el-Mandeb oil route. This attack has instilled fresh fears in global markets, as Bab el-Mandeb is Saudi Arabia’s only working bypass around the Strait of Hormuz.

With both routes now under pressure, Goldman Sachs’ own model has met the trigger conditions for its $120 upside scenario. Other than that, Goldman Sachs has predicted another staggering oil forecast, keeping the escalating Iran war price outlook. The bank believes Brent crude oil may hit $120 if oil flowing through the Strait of Hormuz drops below 45%, a condition that has now been met as conflict between the two countries takes the center stage.

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Why Goldman’s Iran War Oil Model Just Met Its Own Trigger Conditions for the First Time

Goldman Sachs’ oil forecast is in focus again, as predictions made by the bank assumed that the conditions would eventually stabilize. However, that is not the case in present times. Goldman Sachs’ base case oil forecasts have already been met, with the global markets predicting the worst-case scenario.

The biggest change came after the Houthis attacked the Bab el-Mandeb oil route, targeting two Saudi tankers, Layla and Encelia. Since the beginning of the war, Saudi Arabia has increased flows through the Yanbu pipeline to around 5 million barrels a day. The pipeline uses the Red Sea to reroute oil supplies around Hormuz. Now that this route is also under attack, Saudi Arabia’s only working bypass around the closed Strait of Hormuz is under pressure. This has raised fresh concerns across global energy markets and pushed oil price 2026 forecasts toward the worst-case scenario.

These developments also match the trigger that Goldman Sachs outlined for its $120 oil scenario. The bank predicted that the Hormuz oil supply needs to stay below 45% of pre-war levels. That condition has now been met, with Goldman Sachs’ oil forecast indicating that its $120 scenario is already coming into play under current market conditions.

The Iran war price outlook is entering a concerning stage again. With the Strait of Hormuz already under pressure, the attacks on two Saudi tankers are now threatening the Bab el-Mandeb oil route. This is Saudi Arabia’s only working bypass through the Red Sea, used alongside the Yanbu pipeline to bypass Hormuz. But that route is also under pressure, tightening global oil supplies even further.

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History Suggests the Biggest Supply Shock May Still Be Ahead

If such disruptions continue, Goldman Sachs estimates Brent crude oil could average around $100 in 2027. TD Securities’ Ryan McKay expects oil prices to remain between $90 and $100 as global supply tightens. US gasoline prices have also climbed back above $4 per gallon. This reflects growing pressure on global oil routes. McKay later said:

“As prices test the $90 a barrel region in Brent crude oil, CTAs are becoming more likely to begin adding back length once again.”

Goldman further states that the Iran war oil price outlook may worsen if such disturbances continue to exist. The bank outlined that across the five biggest oil shocks of the last 50 years, production losses have averaged 42%, with the biggest supply hits typically appearing years, not weeks, after the initial disruption. During the 1990 Iraq invasion, oil production ultimately fell 81% over four years, while Libya’s 2011 civil war led to a 76% decline in output. This pattern suggests that the Iran war oil price outlook may still represent the early stages of a much larger supply shock rather than its peak.

The oil price 2026 forecasts could strengthen further if both the Bab el Mandeb oil point and Hormuz fail to stabilize under mounting pressure. However, if these disruptions continue to persist, Brent crude oil may jump to $120, turning Goldman Sachs’ forecast into reality.

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