Goldman Boosts Oil Price Forecast by $8 for Brent and $7 for WTI

Price Outlook - Brent crude is projected to average $85 per barrel and West Texas Intermediate (WTI) at $79 per barrel this year, an increase from previous estimates of $77 and $72 respectively [1] - Current trading prices are $112.69 per barrel for Brent and $99.60 per barrel for WTI, reflecting a rise as geopolitical tensions escalate [2] Geopolitical Tensions - President Trump issued an ultimatum to Iran, demanding the reopening of the Strait of Hormuz within 48 hours or face severe military consequences [3] - Iran has threatened to target the energy and water infrastructure of U.S. allies in the region in response to the ultimatum [3] Supply Disruption - Goldman Sachs anticipates that the disruption in tanker traffic through the Strait of Hormuz will last for six weeks, followed by a gradual recovery of crude shipments [4] - The closure of the Strait has resulted in a significant impact, cutting off 20% of global oil flows [4] Market Implications - The current oil supply shock is expected to highlight structural risks associated with the concentration of oil production and spare capacity in the Middle East [5] - Analysts express concerns that the disruption could extend for months, even if military actions cease [4]