Goldman Sachs has revised downward its crude oil price forecasts following a preliminary agreement between the United States and Iran to reopen the Strait of Hormuz, according to a research note released on Monday, June 16, 2026. The investment bank lowered its fourth-quarter Brent crude oil price forecast to $80 per barrel from $90, and cut its 2027 average estimate to $75 from $80. Goldman analysts now assume that Gulf exports will normalise to pre-war levels by the end of July, compared to their previous expectation of end-August normalisation.
The revision reflects expectations that the memorandum of understanding signed by President Donald Trump will effectively end the US-Israeli war with Iran and restore traffic through the strategic waterway. Prior to its closure, the Strait of Hormuz facilitated approximately one-fifth of the world's oil and liquefied natural gas shipments. The blockade had resulted in approximately 14 million barrels per day of output being shut in.
Market reaction to the agreement was immediate. Oil prices eased on Tuesday, declining nearly 5% to their lowest level since March 10. Brent crude futures traded down 0.3% to $82.94 per barrel, while US West Texas Intermediate eased 0.1% to $80.66 per barrel as of 0314 GMT on the day following the announcement.
Goldman Sachs expects WTI to average $75 in the fourth quarter of 2026 and $70 in 2027. The bank also projects a somewhat firmer demand recovery in the second half of 2026 and into 2027, supported by improved affordability at lower price levels. The investment bank's analysis acknowledges a balanced risk outlook for Middle East oil supply.
Goldman notes that normalisation of oil exports from Gulf producers to pre-war levels could require a 12 million-barrel-per-day increase in flows through the Strait of Hormuz from current levels. Additionally, Saudi Arabia and the United Arab Emirates may boost production more aggressively in response to low OECD commercial stocks, while Iran could potentially exceed pre-war production levels if international sanctions are eased. Conversely, Goldman warns of downside risks.
A potential resumption of regional hostilities or strikes on ships could keep exports and production at depressed levels for an extended period. The bank also notes that clearing potential mines from the Strait of Hormuz could require significant time. Source: EnergyNow.com, reporting by Noel John and Swati Verma in Bengaluru
Source: energynow.com