Oil prices extended their rally on Monday as stalled US-Iran peace talks raised fears of prolonged disruption to Middle East crude supplies.
With the Strait of Hormuz effectively closed, Goldman Sachs has lifted its Brent forecasts, warning of “extreme” inventory draws as the global market grapples with a supply shock.
In a Monday note, analysts Daan Struyven and Yulia Zhestkova Grigsby projected Brent crude would average $90 per barrel in Q4. This represented a 12.5% jump from their earlier $80 estimate. Goldman also revised its projections upward for both the second and third quarters.
The revised outlook comes as supply disruptions intensify. According to the bank’s estimates, production losses of 14.5 million barrels per day from the Persian Gulf are pulling global oil stockpiles down at a record-breaking pace of 11 to 12 million barrels a day throughout April.
The analysts warned that “extreme inventory draws are not sustainable”, suggesting that an even steeper drop in demand may be needed if the supply crunch drags on.
Goldman also projects a supply deficit of 9.6 million barrels per day for the current quarter. This marks a reversal from the surplus seen during the same period last year.
“We now assume a normalization in Gulf exports by end-June, versus mid-May prior, and a slower Gulf production recovery. The economic risks are larger than our crude base-case alone suggests because of the net upside risks to oil prices, unusually high refined-product prices, product shortages risks, and the unprecedented scale of the shock,” the analysts added.
Recent research indicates that even a swift reopening of the Strait won’t prevent onshore oil inventory draws from materializing. This further raises concerns for energy markets.
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The Strait of Hormuz OIL SHOCK is unlike anything the world has seen before:
Total oil exports through the Strait of Hormuz have collapsed -95% from a normal pace of ~20 million barrels per day.
Prior to the war, the Strait carried as much as 23.3 million barrels per day at… pic.twitter.com/dcHs0m349b
— Global Markets Investor (@GlobalMktObserv) April 26, 2026
Meanwhile, diplomatic efforts hit a roadblock over the weekend, reinforcing uncertainty. President Donald Trump cancelled a planned trip to Pakistan for envoys Steve Witkoff and Jared Kushner.
The blockade of the Strait of Hormuz remains the central sticking point. Iranian Foreign Minister Abbas Araghchi flew to Moscow on Monday for talks with President Vladimir Putin. The trip extended a regional shuttle that included Pakistan and Oman over the weekend.
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