Overview
Goldman Sachs strategists, led by Yulia Zhestkova Grigsby, warn that the physical oil market is tightening after renewed attacks on tankers in the Strait of Hormuz, reversing an earlier recovery in Persian Gulf export flows and pushing Brent crude back into the mid‑$80s.
Gulf Export Dynamics
Gulf exports initially rebounded to more than 80% of pre‑war levels during the first two weeks following a U.S.–Iran memorandum of understanding, but subsequent tanker attacks caused flows to fall below 50%, estimated at 11 million barrels per day. Goldman estimates the market is now short 13.4 million barrels per day of Persian Gulf flows, a gap that would likely require greater demand destruction and renewed inventory draws absent a near‑term de‑escalation. The bank notes that observable flow data may understate the true picture because some tankers switch off transponders while crossing the strait and reactivate them once clear. Mid‑June Gulf export estimates were revised upward by 1.1 million barrels per day (10%) from a month earlier.
Geopolitical and Production Risks
Strategists identify geopolitical escalation—particularly further attacks on tankers and energy infrastructure—as the primary downside risk to the flows recovery. Based on the April U.S. blockade, a reinstated blockade of Iranian ports could cut Iranian exports by 1.5‑2 million barrels per day. Saudi Arabia and the United Arab Emirates, which possess the largest tanker capacity and highest‑quality fields, drove most of the early‑June rebound, while other crude‑production losses versus February may still total around 9 million barrels per day.
Demand Outlook
On the demand side, the team observes that China’s crude imports may have bottomed after a 5 million‑barrel‑per‑day year‑over‑year decline in June, even as imports elsewhere in Asia returned to seasonal norms. China’s elevated stockpiles stand at 1.9 billion barrels, equivalent to 117 days of demand. The strategists expect Chinese imports to rise as Middle‑Eastern producers cut official selling prices for July‑August.
Price Forecast and Risks
Goldman retains its Brent price forecast of $80 per barrel for the fourth quarter of 2026 and $75 for 2027, but stresses that near‑term risks are skewed to the upside. The bank warns that Brent could overshoot $110 per barrel in Q4 2026 if the Gulf export recovery stalls, while a scenario of stronger production and slower demand recovery could push prices into the $60s by year‑end.