Goldman Sachs, HSBC, and Citi Raise Oil Forecasts as Iran Conflict Enters Third Week

Major brokerages moved to revise their oil price forecasts sharply higher on Thursday, March 12 and Friday, March 13, as the US-Israeli military campaign against Iran, dubbed Operation Epic Fury, entered its third week with no sign of a ceasefire. Brent crude surged to $103.14 per barrel and WTI climbed to $98.71 on March 13, representing gains of roughly 36% and 39% respectively since the conflict began on February 28 [1][9].

Brokerage Forecasts Ratchet Higher

Goldman Sachs led the parade of revisions on March 12, raising its Q4 2026 Brent forecast to $71 per barrel from $66 and its WTI estimate to $67 from $62. The bank's commodity team updated its modeling assumptions to reflect 21 days of reduced Strait of Hormuz flows at approximately 10% of normal levels, followed by a 30-day recovery period, up from its prior assumption of a 10-day disruption [6][7]. Goldman analysts noted that governments might need to release 254 million barrels from global strategic petroleum reserves, supplemented by 31 million barrels of additional Russian crude supply, to reduce the blow to commercial inventories by roughly 50% [8].

Bank of America raised its Q2 2026 Brent forecast to $80, while HSBC lifted its full-year 2026 Brent average to $80 from a previous $65, and Citi Research moved its Q2 estimate to $78 from $70 [1][9]. At the extreme end, Barclays warned that Brent could reach $120 if fighting intensifies, while Macquarie and Kpler flagged scenarios in which prices could surge to $130 or even $150 per barrel should the Strait of Hormuz remain closed for weeks [3][9].

Hormuz Transit Collapses 90%

The forecasts are anchored in the near-total shutdown of the Strait of Hormuz, the chokepoint through which roughly 20% of global seaborne oil and 80 million tonnes of LNG pass annually. According to an ACLED analysis published March 13 by senior analyst Luca Nevola, daily vessel transits have plummeted from an average of 84 per day in the January-to-February period to fewer than 10 since March 2, a decline of nearly 90% [2]. Iran has launched at least 25 attacks on shipping in the Gulf and Strait since February 28, with approximately 40% of incidents targeting oil tankers. Over 30% of those strikes occurred on March 1 alone, signaling that the Hormuz closure was not rhetorical [2].

"The key to restoring stable oil and gas flows lies in resuming transit through the Strait of Hormuz," said IEA Executive Director Fatih Birol on March 11, when the agency announced a record 400-million-barrel emergency reserve release, more than double the 183 million barrels mobilized after Russia's 2022 invasion of Ukraine [11][12].

Gulf Producers Shutter Output

The supply picture has deteriorated well beyond tanker disruptions. Iraq has seen output fall from 4.3 million barrels per day to roughly 1.7 million bpd after halting all export operations following tanker attacks [3]. Kuwait and the UAE have begun shutting in production, and Qatar Energy Minister Saad al-Kaabi declared that production "will not restart until there is a complete stop of hostilities," warning that all Gulf exporters could shut down within days [4][5].

Iranian drone swarms have struck Saudi Arabia's Ras Tanura refinery, forced Qatar to suspend LNG output at the Ras Laffan and Mesaieed facilities, and ignited oil storage terminals in Oman and the UAE [3][5]. JP Morgan estimated that if the conflict extends through the end of March, regional production could decline by 10 million barrels per day, equivalent to roughly 10% of global supply [3].

Reserve Release Fails to Cap Prices

Markets largely shrugged off the IEA's historic intervention. Brent hovered above $90 on March 11 and then surged past $100 on March 12 after Iran's newly appointed Supreme Leader Mojtaba Khamenei declared the Strait of Hormuz "must remain closed" and pledged to open additional fronts if US and Israeli strikes persist [10]. President Donald Trump called $100 WTI "short-term pain" that markets must endure.

"The 400 million may be attention grabbing, but it's all in the rate of how quickly this oil can be dispersed into the market," cautioned Patrick de Haan of GasBuddy. Analyst Pavel Molchanov of Raymond James estimated the release could take 60 to 90 days to meaningfully reach the market [14].

MUFG noted in its March 9 FX Weekly that the crude oil shock had already surpassed the 2022 Russia-Ukraine disruption in scale, with Brent approximately 50% higher since the conflict's start and oil-market volatility at its highest level since the COVID-driven collapse of Q2 2020 [5]. The bank's analysts warned that front-month Brent futures were trading at the largest premium over the three-month contract in 40 years, a sign of acute near-term scarcity.

OCBC's Commodity Compass report pegged a prolonged-halt scenario at $140 per barrel and noted that OPEC+ spare capacity of 4 to 5 million barrels per day "may offer only limited relief if most of it remains inaccessible due to reliance on Hormuz" [4]. Polymarket ceasefire odds stood at just 7% by March 15 and 23% by month-end as of March 9.

Goldman Sachs added that the Iran-led oil shock "makes a June Fed cut hard to justify," projecting only a couple of rate reductions in 2026 with September as the earliest plausible window [8]. The IMF's rule of thumb, cited by MUFG, estimates every $10 per barrel increase in crude adds 0.4 percentage points to global inflation, placing the current surge on track to add at least one full point to US headline CPI [5].

References

[1] https://www.reuters.com/business/energy/analysts-reassess-oil-price-estimates-iran-conflict-disrupts-markets-2026-03-13/ [2] https://acleddata.com/report/iran-targets-global-oil-market-gulf-energy-and-strait-hormuz-are-under-fire [3] https://www.litefinance.org/blog/analysts-opinions/oil-price-prediction-forecast/oil-sounds-the-alarm-forecast-as-of-09032026/ [4] https://www.ocbc.com/iwov-resources/sg/ocbc/gbc/pdf/Commodities%20Research/Outlook/2026/Commodity%20Compass_09%20Mar%202026.pdf [5] https://www.mufgresearch.com/fx/fx-weekly-09-march-2026/ [6] https://www.thestreet.com/investing/goldman-sachs-resets-oil-price-target-for-rest-of-2026 [7] https://oilprice.com/Latest-Energy-News/World-News/Goldman-Sachs-Raises-Oil-Price-Forecast-as-Middle-East-Conflict-Escalates.html [8] https://www.goldmansachs.com/insights/articles/how-will-the-iran-conflict-impact-oil-prices [9] https://www.globalbankingandfinance.com/factbox-analysts-reassess-oil-price-estimates-iran-conflict/ [10] https://www.cnbc.com/2026/03/12/oil-prices-jump-iea-record-reserve-release-markets-doubt-relief.html [11] https://www.npr.org/2026/03/11/nx-s1-5743816/iran-war-oil-reserves-iea [12] https://www.euronews.com/business/2026/03/11/germany-and-japan-to-tap-oil-reserves-as-iea-and-g7-weigh-record-release [13] https://www.bloomberg.com/news/articles/2026-03-11/iea-confirms-huge-release-of-emergency-oil-stockpiles [14] https://www.businessinsider.com/oil-prices-reserves-release-iea-energy-economy-iran-war-2026-3