Since the outbreak of conflict on February 28, Brent crude has surged more than 36%, while WTI has climbed roughly 39%, with both benchmarks briefly topping $119 per barrel on Monday—levels not seen since mid-2022. The ongoing hostilities have effectively shut the strategic waterway, leaving tankers stranded for over a week and forcing producers to curtail output as storage facilities approach capacity.
In a note released Thursday, Goldman analysts said they now expect 21 days of severely reduced Strait of Hormuz flows, operating at only 10% of normal levels, followed by a gradual 30-day recovery. This marks a significant revision from the bank’s previous assumption of a 10-day disruption. The firm warned that daily oil prices could surpass their 2008 record highs if these constrained flows persist through March.
Goldman factored in a larger policy response in its forecasts, including the release of 254 million barrels from global strategic petroleum reserves (SPR) and 31 million barrels drawn from Russian crude stocks, which together could reduce the impact on global commercial oil inventories by nearly half. The International Energy Agency (IEA) on Wednesday announced plans to release a record 400 million barrels from strategic stockpiles, primarily contributed by the U.S., to mitigate the spike in global crude prices triggered by the conflict.
In Goldman's base scenario, where Strait of Hormuz flows begin recovering from March 21, the bank assumes that IEA member states will not fully utilize the 400 million barrels available due to logistical limits—specifically, a maximum draw of 3 million barrels per day from OECD SPRs and a four-week phase-out of releases. Under this projection, WTI prices are expected to moderate to the low $70s by early June.
The updated forecasts reflect mounting concerns about the global energy market as geopolitical tensions intersect with limited spare capacity, illustrating how supply shocks can rapidly amplify oil price volatility.