Reviewing five rounds of oil shocks, Goldman Sachs predicts: Oil prices may surpass the 2008 peak in the short term and remain above $100 in the long term.

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Goldman Sachs believes Brent crude may break through the historical high of 2008, and the risk of oil prices "remaining at $100 for the long term" is rising.

According to Wind Trading Desk, on March 19, the commodity research team led by Daan Struyven at Goldman Sachs issued a report stating that amid ongoing obstacles in the Strait of Hormuz, the upward trend in oil prices is difficult to stop.

If this sluggish situation continues and the market starts to worry that supply disruptions might be prolonged, Brent crude prices are very likely to break the historical high set in 2008.

Data shows Brent oil price surged to $147.50/barrel in July 2008, setting a record high.

The report further emphasizes that any rise in risk expectations about the U.S. potentially restricting crude oil exports will further widen the price spread between Brent and American WTI crude.

Most importantly, Goldman Sachs predicts that in the post-reopening world of the Strait, due to infrastructure damage, production may not recover for a long time.

Reviewing five historical oil shocks: Large supply shocks tend to last for years

Goldman's baseline assumption is that the flow through the Strait of Hormuz will gradually recover starting in April, and prices will fall back to the $70 range in the fourth quarter of 2026.

The problem is that this path implies strong assumptions on the supply side – not only must it reopen, but production must recover quickly after reopening.

To evaluate the "restoration speed," Goldman Sachs reviewed the five largest supply shocks over the past 50 years and calculated that affected countries still had an average production loss of 42% four years later. The main reasons are usually physical damage to oil fields, pipelines, ports and other infrastructure, and severe lack of subsequent investment.

Therefore, Goldman stresses that if Iran and neighboring regions suffer substantial damage to production potential, the time that oil prices stay above $100 in risk scenarios may far exceed current market expectations.

Why is this clue amplified? Because Middle East supply holds too much weight.

In 2025, Iran's crude output will be 3.5 million barrels/day; the other seven Persian Gulf countries combined produce 21.8 million barrels/day, totaling about 30% of global crude production. Additionally, the region has a total offshore oil field capacity of 6.5 million barrels/day; due to engineering complexity and high safety requirements, recovery may be even slower.

The report analyzes that if Iran faces a production gap similar to the historical average of 42%, its crude output will be about 1.5 million barrels/day below pre-shock levels.

Countries may frantically stockpile oil—which itself will drive up prices

The sustained uncertainty brought by the Hormuz crisis might trigger accelerated construction of global Strategic Petroleum Reserves (SPR) starting in 2027.

Goldman Sachs analyzes the reasons:

First, by the end of 2026, OECD countries’ strategic reserves may be depleted to very low levels;

Second, this huge shock may prompt governments to increase their reserve targets for the future;

Third, the 172 million barrels of U.S. SPR provided to the market are an "exchange," not direct sales—they need to be returned later with a premium.

Goldman estimates that if global SPR build-up speeds up by 1.2 million barrels/day compared to the baseline, it will add about $12/barrel of upside price pressure by year-end 2027.

High oil prices will ultimately kill high oil prices

Currently, nearly all global spare crude capacity is trapped in the Persian Gulf due to the Hormuz Strait disruption.

Goldman points out that historical experience shows if there’s no large-scale long-lasting capacity loss, after the Strait reopens, OPEC core countries led by Saudi Arabia will likely use spare capacity to stabilize the market and offset disruption losses.

In past supply crises, Saudi Arabia and UAE usually ramped up production enough within two quarters to offset 70%-90% of supply losses.

Releasing restricted capacity has limited effect in suppressing oil prices; what truly kills high oil prices is high oil prices themselves.

Goldman believes high oil prices will accelerate energy efficiency and fuel substitution, reducing the economy’s dependence on oil. Second, high oil prices will directly drag down the global economy, especially activity in energy-intensive sectors.

Europe’s industrial natural gas demand, since the 2022 energy crisis, is still 20%-25% lower than pre-crisis levels—an object lesson.

Overall, the balance still tilts toward further price increases

Goldman emphasizes that whether in the short term or through 2027, oil price risk overall remains biased toward the upside.

The sustained nature of several historic supply shocks shows that if supply disruptions last longer or there’s large-scale persistent capacity loss, the likelihood of oil prices staying above $100/barrel for the long term is real.

Goldman’s baseline forecast for Brent oil in Q4 2027 is $69/barrel. The report simulates the deviation under different risk scenarios:

60-day interruption in the Strait of Hormuz: oil price +$24;Long-term Middle East capacity loss of 2 million barrels/day: oil price +$20;Both occur together: oil price +$42;Core OPEC countries raise output by 1 million barrels/day long-term: oil price -$4;Global SPR build-up accelerates: oil price +$12.

For investors, the key now is not when the Strait reopens, but after reopening, how much permanent scarring remains in Middle East oil capacity. This will determine the oil price center for the coming years.

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The above content is compiled from Wind Trading Desk.

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