Brent crude oil climbed above $91 per barrel on July 21 as military escalation between the United States and Iran raised fears of supply disruption through the Strait of Hormuz. Goldman Sachs warned in a July 20 note that Brent could exceed $120 per barrel in the fourth quarter if disruptions continue around the strait. About 20% of global oil supply passes through the Strait of Hormuz, which connects Gulf producers with global buyers, making any confrontation in the region closely watched by energy markets.
Brent Crude Rises Above $91 as Strait of Hormuz Risks Escalate
Brent crude futures briefly crossed $91 per barrel on July 21 before easing into the $88 to $89 range. WTI crude, the U.S. benchmark, also moved above $84 per barrel before pulling back toward the $81 to $83 range. Both oil benchmarks gained more than 15% in the week leading up to July 20.
US military strikes on Iran and Iranian threats around Gulf shipping have raised concerns over export flows. Saudi Arabia, the UAE, Kuwait, and Iraq depend heavily on the Strait of Hormuz for export capacity. Iran's position along the route makes any confrontation closely watched by energy markets. Iran-backed Houthi rebels in Yemen have also threatened a naval blockade on Saudi shipments.
Goldman Sachs Warns Brent Could Reach $120 in Q4
Goldman Sachs analysts warned that Brent crude could rise above $120 per barrel in the fourth quarter if disruptions around the Strait of Hormuz continue. The bank said this outcome is not its central forecast. The bank's base-case view assumes Middle East tensions ease. Under that scenario, Goldman expects Brent crude to average $80 per barrel in the fourth quarter and $75 per barrel next year.
Analysts said the risks remain "tilted to the upside" because shipping disruptions may continue through the Strait of Hormuz. Further interruptions in the Red Sea could also keep pressure on oil markets. In a July 20 note, Goldman analysts wrote, "Escalation in the Middle East and the decline in estimated Persian Gulf flows to below 45% of pre-war levels have pushed oil prices back up."
The bank also said lower global oil inventories during the second quarter made the market more exposed to supply shocks. Reduced storage levels can make any disruption more painful for refiners and buyers. Goldman added that weaker crude imports by China and stronger demand response could limit the size of any rally.
Goldman recommended a long position in the European diesel timespread between December 2026 and March 2027 for investors seeking protection from prolonged geopolitical risks. The bank said diesel markets were already tight before the conflict escalated. Ukrainian attacks on Russian refineries, hurricanes, extreme summer temperatures, and refinery maintenance delays remain additional risks.
US Gasoline Prices Climb Above $4 Per Gallon
The price shock reached U.S. consumers quickly. The national average gasoline price rose above $4 per gallon, compared with $3.872 a week earlier. Some higher-cost regions have already seen pump prices move above $5 per gallon. The rise added fresh pressure on households and businesses exposed to transport and fuel costs.
Oil prices have risen about 45% since the start of 2026. A sustained Brent move above $91 could keep inflation concerns active and complicate the Federal Reserve's rate outlook.
FAQ
What did Goldman Sachs warn about Brent crude oil prices?
Goldman Sachs warned in a July 20 note that Brent crude could rise above $120 per barrel in the fourth quarter if disruptions around the Strait of Hormuz continue. The bank said this outcome is not its central forecast. Goldman's base-case view assumes Middle East tensions ease, with Brent averaging $80 per barrel in the fourth quarter and $75 per barrel next year.
Why did Brent crude oil rise above $91 per barrel on July 21?
Brent crude climbed above $91 per barrel on July 21 as military escalation between the United States and Iran raised fears of supply disruption through the Strait of Hormuz. About 20% of global oil supply passes through the strait, which connects Gulf producers with global buyers. US military strikes on Iran and Iranian threats around Gulf shipping raised concerns over export flows.
