Goldman Sachs Lifts Oil Forecast as IRGC Claims Complete Control of Strait of Hormuz

Goldman Sachs raised its second-quarter 2026 Brent crude forecast by $10 to $76 per barrel and its WTI estimate by $9 to $71 on Tuesday, warning that if shipping volumes through the Strait of Hormuz remain flat for five more weeks, Brent would "likely reach $100" [1]. The revision came as the Islamic Revolutionary Guard Corps (IRGC) claimed "complete control" of the strait and warned that vessels transiting the waterway would be targeted, escalating a conflict that has already shut down a fifth of global liquefied natural gas supply [2].

Brent crude climbed 2.6% to $83.53 per barrel on March 4, while West Texas Intermediate rose 2.3% to $76.29. At its intraday high, Brent touched $85.12, a level that MUFG noted represented a roughly 40% gain year-to-date [2].

Operation Epic Fury and the Escalation Timeline

The current conflict traces to Operation Epic Fury, the United States military campaign launched on February 28 by President Donald Trump. The operation struck almost 2,000 targets across Iran within 48 hours, killing Supreme Leader Ali Khamenei [3]. In retaliation, the IRGC launched strikes against U.S. military bases in Bahrain, Qatar, the UAE, Kuwait, and Saudi Arabia [1].

Qatar was forced to shut down LNG operations at the Ras Laffan complex following a drone attack, removing approximately one-fifth of global LNG supply from the market in a single stroke [1]. European natural gas prices surged roughly 80% during the week, reaching approximately EUR 57 per megawatt-hour [2]. Trump indicated the war could last four to five weeks [1].

Supply Loss Estimates and OPEC+ Response

JPMorgan estimated that a prolonged Hormuz closure could remove up to 4.7 million barrels per day from global supply, a figure that would represent the single largest supply disruption since the 1990 Iraqi invasion of Kuwait [1]. ANZ set its Brent average forecast at $90 per barrel for the conflict period [1].

In an attempt to cushion the blow, OPEC+ declared a production increase of 206,000 barrels per day starting in April [1]. The increment is modest relative to the potential loss, and analysts noted that most OPEC+ members have limited spare capacity to deploy quickly.

Currency and Crypto Market Fallout

The U.S. Dollar Index (DXY) rose to 99.07 as investors sought safe-haven assets [2]. MUFG observed that speculative short-dollar positions had reached their highest level since March 2022 and were being forcibly squeezed by the flight to safety [2].

Emerging-market currencies bore the heaviest losses. The Hungarian forint fell 4.6%, the Chilean peso dropped 3.6%, and the South African rand declined 3.4% [2].

Bitcoin dropped from approximately $67,000 to $63,000 before recovering to $69,000, while $128 billion was wiped from total cryptocurrency market capitalization [1]. Crypto outflows from Iran surged 700%, suggesting that Iranian holders were moving assets offshore in anticipation of further instability [1].

Monetary Policy Implications

New York Fed President John Williams stated that the oil-price surge would delay the Federal Reserve's timeline for interest-rate reductions, with markets now pricing fewer than two to three cuts for the remainder of 2026 [1]. The Fed is widely expected to hold rates steady at its March 18 meeting.

Gold futures rose 0.9% to $5,169.50 per ounce on March 4, partially recovering from a decline of more than 4% in the prior session. The counterintuitive gold sell-off during a period of military escalation reflected dollar strength and rising real yields rather than a diminished appetite for safe-haven assets [1].

The Goldman Sachs forecast revision carries significant weight given the bank's track record on commodity calls, and its $100 scenario, conditional on just five more weeks of flat Hormuz traffic, underscores how rapidly the situation could deteriorate for global energy markets.

References

[1] Yahoo Finance, "Goldman Sachs Raises Oil Price Forecast Amid Iran-U.S. Conflict," March 4, 2026. https://finance.yahoo.com [2] MUFG, "FX Focus: Strait of Hormuz Disruption and Market Impact," March 4, 2026. https://www.mufg.jp [3] Forbes, "Operation Epic Fury: Timeline and Market Implications," March 3, 2026. https://www.forbes.com