Goldman Warns Energy Market
Goldman Sachs Lifts Crude Forecasts, Warns of Soaring Gas Prices Amid Hormuz Disruption
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Goldman characterized the one-month LNG normalization delay (end-June to end-July) as a “small but meaningful signal” that the physical gas market “is not clearing as quickly as hoped,” and said the quantified Hormuz upside (TTF >100 EUR/MWh this winter) would “anchor trader thinking on the upside,” even though a sustained blockade is not its base case.
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For oil, Goldman’s revised disruption model assumes “21 days of low Strait of Hormuz oil flows at 10% of normal levels” followed by a “30-day gradual recovery,” compared with its earlier expectation of a “10-day disruption.”
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Goldman’s SPR/inventory modeling went beyond the headline IEA 400 million barrels: it incorporated “254 million barrels of actual global strategic petroleum reserve (SPR) releases” plus “31 million barrels of draws in Russian crude,” which it said reduces the hit to global commercial oil inventories by “nearly 50%.” In its base case, it also assumes IEA members “won’t fully release” all of the 400 million barrels available.
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Goldman warned that if Hormuz flows stay depressed through March, “spot prices are likely to exceed their 2008 peak of $147,” adding a specific threshold condition to its longer upside oil-risk framing.
Goldman Sachs raised its crude oil price forecasts for Q4 2026 on Tuesday, warning that a longer-than-expected Strait of Hormuz disruption is straining global energy markets more than it first predicted. The bank now assumes 21 days of oil flows at just 10% of normal levels, followed by a 30-day gradual recovery — more than double the 10-day disruption it modeled earlier, according to Investing Live.
On natural gas, Goldman pushed back its timeline for European LNG market normalization by one month, to end-July 2026. The bank called the delay a "small but meaningful signal" that the physical gas market "is not clearing as quickly as hoped."
Goldman's Hormuz Disruption Model Gets Significantly Worse
Goldman's earlier model assumed a quick 10-day hit to Hormuz flows. Its revised model now assumes 21 days of flows at 10% of normal capacity, then a slow 30-day climb back to regular levels. That means roughly seven weeks of heavily reduced supply passing through the world's most critical oil chokepoint, Investing Live reported.
The bank raised its Brent and WTI crude forecasts for Q4 2026 as a result. More strikingly, Goldman warned that if Hormuz flows stay depressed into March 2027, "spot prices are likely to exceed their 2008 peak of $147" per barrel. That record price triggered a global economic slowdown when it was hit 18 years ago.
SPR Releases Cushion the Blow — But Less Than Headlines Suggest
The International Energy Agency struck a deal to release 400 million barrels of strategic petroleum reserves (SPR) — government-held emergency oil stockpiles — to calm markets. But Goldman's internal model only counts 254 million barrels of actual global SPR releases, plus 31 million barrels of draws on Russian crude. The bank also assumes IEA members "won't fully release" the full 400 million barrels available.
Together, Goldman says these moves reduce the damage to global commercial oil inventories by "nearly 50%." That is a meaningful buffer. But it also means the real supply cushion is thinner than the IEA's headline figure implies — and that strategic reserves are being drawn down fast.
European Gas Prices Could Double if Blockade Lasts Through Winter
Europe buys much of its natural gas through the TTF trading hub, priced in euros per megawatt-hour (EUR/MWh). Goldman kept its base-case TTF forecast largely steady for the second half of 2026 and through 2027. But it flagged a severe risk case: if the Hormuz blockade holds into winter, TTF could spike above 100 EUR/MWh — more than double the current base case, according to Investing Live.
Goldman said that even if the blockade ends sooner than feared, the 100 EUR/MWh threshold will "anchor trader thinking on the upside." In plain terms: the mere possibility of that price keeps markets nervous and expensive. The bank warned that gas at those levels would crush European industrial demand and drive up power costs across the continent.
Long-Term Outlook Stays Bearish Despite Near-Term Crunch
Goldman's pain forecast has an expiration date. The bank dropped its TTF price expectations for 2028 and 2029. The reason: a large wave of new LNG liquefaction projects — facilities that convert gas into liquid form for shipping — is under construction in the US and Qatar. Goldman expects those projects to flood global markets with supply by the end of the decade.
For now, though, the market is caught in what Goldman's research implies is a dangerous bridge period. Supply is tight. Strategic reserves are being spent down. And a sustained Hormuz blockade — not Goldman's base case, but a real risk — could push both oil and gas prices to levels that trigger widespread economic damage well before new LNG supply arrives to ease the squeeze.
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