``` If the blockade of the Strait of Hormuz becomes "prolonged," how high will oil prices rise? ```

``` If the blockade of the Strait of Hormuz becomes "prolonged," how high will oil prices rise? ```

```

This is the largest oil supply shock in history.

On March 11, 2026, Goldman Sachs’ commodities research team urgently raised its oil price forecast, lifting Brent crude’s fourth-quarter price estimate from $66 per barrel to $71, and WTI crude’s forecast from $62 to $67 per barrel. The reason is that the blockade of the Strait of Hormuz is extending beyond previous expectations. The estimated impact on Persian Gulf exports has now reached 16.2 million barrels per day (16.2mb/d)—an unprecedented scale among all recorded supply shock events.

According to Xinhua, a Thai cargo ship was attacked while sailing in the Strait of Hormuz on the 11th. Twenty crew members have been rescued and sent to Oman for shelter. The Islamic Revolutionary Guard Corps of Iran issued a statement reaffirming its absolute jurisdiction over the Strait of Hormuz. The statement declared that the United States and its partners have lost the right to pass through the Strait of Hormuz.

Analysts warn that if the blockade of the Strait of Hormuz lasts for 60 days, Brent crude may soar to $93. If the market falls into extreme panic, the average price in March may even challenge the historic peak of $140.

For investors, the real risk lies in the nonlinear nature of the price path: if the interruption is extended from 21 days to 30 days, oil prices rise by only an additional $5; but if further extended to 60 days, Brent crude will break through $93—meaning risk premium is accumulating at an accelerating rate.

The largest supply shock in history: a daily shortfall of 16.2 million barrels is now a reality

From the data perspective, the current situation has surpassed all previous historical cases. The estimated total impact on Persian Gulf crude exports has reached 16.2 million barrels per day, far exceeding the supply interruptions during the 1973 oil crisis, the 1991 Gulf War, and the 2011 Libyan civil war.

Goldman's scenario models show that the peak of lost Middle Eastern crude production will reach 11 million barrels per day (currently 6.5mb/d), and then recover relatively quickly. Even so, cumulative production losses will be astronomical:

In the 21-day (new baseline) scenario, cumulative loss of Persian Gulf crude output is 359 million barrels;

In the 30-day scenario, the loss expands to 526 million barrels;

In the 60-day scenario, loss reaches 1.094 billion barrels.

During the blockade, the number of tankers transiting the Strait of Hormuz remains at a low level—this real-time data is also a key leading indicator for the market to judge the duration of the interruption.

March risk premium: the market needs high prices to "force demand destruction"

In Goldman’s “pre-shock/high uncertainty” scenario models, the logic of March price movements is unique: the market must use sufficiently high prices to forcibly achieve demand destruction, to prevent inventories from falling below critical levels.

In the oil market, when supply suddenly decreases substantially (such as the imagined 15 million barrels/day here, nearly 15% of global demand), inventories alone are not enough. Prices, at this point, must soar to levels high enough where consumers and businesses find it “too expensive,” so they’re forced to cut spending (for example, drive less, factories shut down, switch to alternatives).

According to Goldman’s sensitivity analysis, the likely range for the March average oil price is:

Analysts warn, the longer the interruption, the lower the market’s tolerance for falling inventories, and the faster demand destruction must occur, the higher the price must climb. In the most extreme situation (120 days interrupted + rapid demand response), short-term prices could reach $140/barrel. If flows through Hormuz remain depressed throughout March, oil prices could very likely exceed the historic peak of 2008.

Policy response: SPR releases will "hedge half the inventory shock"

Faced with an unprecedented supply shortfall, the global policy response will also be significant. Goldman estimates that combined releases from 254 million barrels of global Strategic Petroleum Reserves (SPR), plus 31 million barrels of Russian oil en route, policy interventions can reduce the impact on global commercial oil inventories by nearly 50%—from 617 million barrels to 332 million barrels.

However, policy tools have limitations. In the baseline scenario (Hormuz flows resume from March 21), Goldman believes IEA member states will not release the full 400 million barrels of SPR authorized. The reasons are:

OECD SPR logistics cap the release rate at about 3 million barrels per day;

The release plan is expected to be phased out over 4 weeks, lasting until early June—by which time WTI price may have dropped just above $70;

IEA emergency inventory currently slightly exceeds 1.2 billion barrels, already at relatively low levels, and widespread further use has practical constraints.

It’s worth noting that in scenarios of 30 days or longer interruption, OECD SPR releases may reach or exceed the 400 million barrel cap, at which point the policy buffer will become much narrower.

For asset allocators, the central dilemma of the current situation is: the baseline scenario remains controllable (Q4 Brent at $71), but tail risks are extremely expensive. If the blockade duration stretches to 30 or even 60 days, oil prices will enter a nonlinear upward channel, with systemic impacts on inflation expectations, energy stock valuations, and macro policy paths.

Before the situation clarifies, March oil prices will continue to be supported by a massive risk premium—the market uses today’s high prices to hedge against possible greater shortfalls tomorrow. Any signal of conflict ending quickly will be the strongest catalyst for oil price declines; any news of an extended blockade means upside potential is still far from capped.

Goldman analyst Daan Struyven has raised fourth-quarter Brent crude forecast from $66 to $71 per barrel, and WTI crude from $62 to $67 per barrel in his report.

Risk Disclosure and DisclaimerThe market involves risk, and investments require caution. This article does not constitute personal investment advice and does not take into account the individual investment objectives, financial situations, or needs of specific users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Investments made accordingly are at your own risk. ```