Goldman Sachs has outlined a dramatic but short-lived storyline for the oil market in 2026.
They predict a sharp, temporary spike in oil prices, framing this year's narrative not as a sustained crisis, but as a transient shock. The forecast sees Brent crude oil averaging over $100 per barrel in March, quickly cooling to around $85 in April, and then gradually returning to the low $70s by the end of the year. This path suggests a sudden supply crunch followed by a powerful policy response and eventual normalization.
The primary cause for this turbulence is a severe disruption in the Strait of Hormuz, a critical chokepoint through which about one-fifth of the world's oil supply travels. An effective closure of this strait in early March immediately squeezed the physical market, causing prices to vault into triple digits. This real-world event confirmed earlier warnings that such a disruption could easily push oil past the $100 mark.
However, this spike is expected to be short-lived due to a decisive countermeasure. The International Energy Agency (IEA) has orchestrated a record-breaking coordinated release of 400 million barrels from global strategic petroleum reserves (SPR). This massive injection of emergency supply acts as a 'policy brake,' offsetting a significant portion of the lost production. This action is the key reason why Goldman Sachs expects prices to drop back to the mid-$80s in April rather than staying elevated.
Finally, the return to the low $70s later in the year is based on the market's underlying fundamentals. Before the Hormuz crisis, the consensus view for 2026 was actually a potential oil surplus due to resilient non-OPEC supply and large inventory builds in 2025. Once the immediate geopolitical shock fades and supply routes are restored, the market is expected to revert to this long-term equilibrium, where supply and demand are more balanced at a lower price point.
- Glossary:
- Strait of Hormuz: A narrow waterway connecting the Persian Gulf to the open ocean, it is one of the world's most important strategic chokepoints for oil transport.
- Strategic Petroleum Reserve (SPR): A stockpile of crude oil maintained by a country to safeguard against severe supply disruptions and serve as a tool for economic and national security.