Gasoline prices have climbed for nine straight weeks. Airline fuel surcharges are back. And Goldman Sachs now says the pain has further to run: the bank raised its fourth-quarter Brent crude forecast to roughly $90 per barrel, up from about $80, warning that “extreme inventory draws” caused by the near-total shutdown of shipping through the Strait of Hormuz will keep oil markets tight through the end of 2026.
The revision, reported by Bloomberg on April 27, reflects a market still reeling from the Middle East conflict that erupted on February 28 and severed one of the world’s most critical energy chokepoints. For consumers, businesses, and governments already stretched by months of rising fuel costs, the bank’s updated call carries a blunt message: relief is not close.
How big is the supply hole?
The Strait of Hormuz, a narrow waterway between Iran and Oman, historically carried roughly 20% of the world’s petroleum liquids, according to the U.S. Energy Information Administration. That flow has collapsed since late February. The International Energy Agency’s March Oil Market Report documented the disruption as severe enough to trigger the largest coordinated emergency stock release in the agency’s history.
On March 11, IEA member countries agreed to make 400 million barrels available from strategic petroleum reserves. The intervention helped cool a price spike that had briefly pushed Brent above $120 per barrel. By mid-March, Brent had settled to approximately $92.
But the cushion has worn thin. Even with reserve barrels flowing, physical market signals point to persistent scarcity. In early April, spot crude in the North Sea traded at a steep premium to front-month Brent futures, a pattern that pricing agencies including S&P Global Commodity Insights (Platts) and Argus Media associate with acute near-term shortage. Refiners are bidding up every available cargo because they cannot count on future shipments arriving on schedule.
Inventories were already lean before the conflict. EIA short-term data showed global stocks trending below five-year averages heading into 2026. Layering a sudden collapse in Hormuz traffic on top of that deficit explains why relatively modest shifts in headline production numbers have translated into outsized price swings.
Four variables that could move prices sharply
Goldman’s $90 target is a central estimate, not a ceiling or a floor. Several forces could push the outcome well in either direction.
Speed of the reserve drawdown. The IEA’s 400-million-barrel commitment is confirmed, but as of early May no public data quantifies how much of that oil has physically reached refineries. Until drawdown rates and replenishment plans are disclosed, the true state of global stockpiles remains unclear. If reserves are depleted faster than expected without a diplomatic resolution, the buffer disappears.
The fate of the strait. Goldman’s forecast assumes prolonged supply tightness. A diplomatic breakthrough that reopens the waterway faster than anticipated would narrow the supply gap quickly and could pull Brent well below $90. A deeper escalation, or a strike on port infrastructure, could send prices back toward $120 or higher.
The U.S. shale response. Higher prices give American producers a powerful incentive to drill more. The EIA’s April Short-Term Energy Outlook projects continued growth in U.S. output and has nudged production expectations higher. But pipeline bottlenecks, export terminal capacity, and cost inflation impose real limits on how fast those barrels can reach the buyers who need them most, particularly refiners in Asia that historically depended on Persian Gulf crude and now face longer, costlier shipping routes.
OPEC+ discipline. The producer alliance holds significant spare capacity, concentrated in Saudi Arabia and the United Arab Emirates. Whether OPEC+ chooses to ramp up output to stabilize prices or holds back to protect revenue will shape the second half of 2026 as much as any single geopolitical development. So far, the group has signaled caution, but that calculus could shift if prices climb further or if diplomatic pressure from Washington and Beijing intensifies.
What consumers and businesses are already feeling
The supply crunch is not an abstraction. U.S. retail gasoline prices have risen sharply since March, squeezing household budgets heading into the summer driving season. Airlines have reimposed or increased fuel surcharges on international routes, and freight carriers have flagged higher diesel costs in earnings calls throughout April. For manufacturers that rely on petrochemical feedstocks, the price spike is feeding through to input costs at a time when margins were already under pressure.
Central banks are watching closely. The Federal Reserve flagged energy-driven inflation risks in its most recent policy statement, and the European Central Bank has cited oil prices as a key uncertainty in its spring outlook. If Brent stays near $90 or climbs higher, the inflationary impulse could complicate rate-cut timelines that markets had been counting on earlier this year.
A forecast, not a fact
Goldman’s $90 call is grounded in credible data: documented strait closures, confirmed reserve releases, and observable physical market tightness. But it remains a projection built on assumptions about conflict duration, reserve deployment speed, and producer behavior that could change quickly. Other major forecasters, including JPMorgan and the IEA itself, may land on different numbers from the same underlying data.
What the measured evidence does support is that the oil market in May 2026 is tight, volatile, and unusually sensitive to surprises. Tanker tracking data, published inventories, and spot-futures spreads all confirm that supply is not keeping pace with demand. Whether Brent lands at $85 or $95 or somewhere else entirely depends on variables that no bank can model with precision: the trajectory of a conflict, the speed of diplomacy, and the willingness of producers to open the taps.
Why budgeting for turbulence beats betting on a single barrel price
Until the Strait of Hormuz reopens or alternative supply routes prove they can absorb the lost volume, the defining feature of this market is not any particular price level. It is the gap between the best case and the worst case. Goldman’s forecast offers a useful anchor, but consumers filling up their tanks, CFOs budgeting fuel costs, and policymakers weighing reserve strategy should all be planning for continued turbulence. The one outcome that looks least likely right now is a quiet summer for oil.
Vince Coyner is a serial entrepreneur with an MBA from Florida State. Business, finance and entrepreneurship have never been far from his mind, from starting a financial education program for middle and high school students twenty years ago to writing about American business titans more recently. Beyond business he writes about politics, culture and history.
