Analysts at Goldman Sachs have raised their forecast for Brent crude — the international oil benchmark — to USD 90 per barrel for the fourth quarter, while US West Texas Intermediate (WTI) crude pegged at USD 83 per barrel, as the prolonged closure of the Strait of Hormuz continues to tighten global supply, according to multiple reports.
The brokerage said the disruption has triggered ‘extreme’ inventory drawdowns, with an estimated 14.5 million barrels per day of crude production losses from the Persian Gulf pushing global stockpiles to decline at a record pace of up to 12 million barrels per day in April.
The supply shock, driven by the ongoing US-Iran conflict and a near halt in shipments through the critical Strait of Hormuz, has significantly altered the global oil balance.
The market is now expected to see a deficit of about 9.6 million barrels per day in the current quarter, compared to a surplus last year.
Brent crude has already surged nearly 50 per cent since the conflict escalated in late February, with futures hovering above USD 100 per barrel, raising concerns over inflationary pressures and a potential drag on global economic growth.
Goldman Sachs also flagged that such sharp inventory drawdowns are unsustainable, warning that either supply must normalise or demand destruction could intensify if disruptions persist.
The brokerage expects a slower recovery in Gulf oil exports, with normalisation now seen by the end of June, compared to earlier expectations of mid-May, reflecting prolonged geopolitical uncertainty.
Separately, analysts at JPMorgan said oil markets are being forced into rapid rebalancing as supply disruptions widen. They estimate global supply losses have risen to nearly 14 million barrels per day in April, triggering sharp inventory drawdowns and forcing demand adjustments.
With spare production capacity largely inaccessible due to the Strait of Hormuz closure, the burden of adjustment has shifted to inventories and demand destruction.
JPMorgan noted that even modest supply shocks can lead to outsized price moves in oil, given its inelastic demand, warning that further price increases may be needed to fully rebalance the market if disruptions persist.
Meanwhile, Morgan Stanley said oil exports from the Persian Gulf have dropped by over 14 million barrels per day due to the Hormuz closure, contributing to a sharp fall in global inventories.
Despite some easing in geopolitical risk premiums following ceasefire signals, Goldman Sachs cautioned that upside risks to oil prices remain, particularly if supply disruptions deepen or extend beyond current assumptions. It also said weaker global demand is unlikely to fully offset the supply shortfall, keeping the oil market structurally tight in the near term.
Notably, Brent crude traded at USD 108.09 per barrel, hitting an intraday high around 1 p.m., up 2.62 per cent from the previous close. Similarly, US West Texas Intermediate rose 2.47 per cent to touch an intraday high of USD 96.74.
