Will the blockade of the Strait of Hormuz become prolonged, and how high will oil prices rise?

This is the largest oil supply shock in history.

Goldman Sachs’ commodities research team urgently raised their oil price forecasts on March 11, 2026, increasing the Q4 Brent crude oil price forecast from $66 per barrel to $71, and the WTI crude oil forecast from $62 to $67. The reason is that the blockade of the Strait of Hormuz is exceeding previous expectations. Currently, the estimated impact on Persian Gulf exports has reached 16.2 million barrels per day (16.2 mb/d)—an unprecedented scale in recorded supply disruption events.

According to Xinhua News Agency, a Thai cargo ship was attacked in the Strait of Hormuz on the 11th. Twenty crew members have been rescued and taken to Oman for placement. The Islamic Revolutionary Guard Corps of Iran issued a statement reaffirming its absolute jurisdiction over the Strait of Hormuz. The statement said the U.S. and its partners have lost the right to pass through the Strait of Hormuz.

Analysts warn that if the blockade of the Strait of Hormuz continues for 60 days, Brent crude could surge to $93. If the market falls into extreme panic, the March average price could even challenge the historical high of $140.

For investors, the real concern is the nonlinear nature of price paths: extending the disruption from 21 days to 30 days only adds $5 to oil prices; but if extended further to 60 days, Brent crude could break through $93—meaning risk premiums are accelerating.

Largest supply shock in history: a daily shortfall of 16.2 million barrels is now a certainty

In terms of scale, the current situation surpasses any previous historical case. The estimated total impact on Persian Gulf oil exports is as high as 16.2 million barrels per day, far exceeding the disruptions during the 1973 oil crisis, the 1991 Gulf War, and the 2011 Libyan civil war.

Goldman Sachs’ scenario models show that the peak loss of Middle Eastern oil production could reach 11 million barrels per day (current 6.5 mb/d), followed by a relatively quick recovery. Even so, the cumulative production loss will be an astronomical figure:

In the 21-day (new baseline) scenario, cumulative loss of Persian Gulf oil is 359 million barrels;

In the 30-day scenario, loss expands to 526 million barrels;

In the 60-day scenario, loss reaches 1.094 billion barrels.

During the blockade, the number of oil tankers passing through the Strait of Hormuz remains low—this real-time data is a key leading indicator for market judgment on the duration of the disruption.

March risk premium: markets need high prices to “force demand destruction”

In Goldman Sachs’ “Pre-Impact/High Uncertainty” scenario model, the price trend in March follows a unique logic: the market must use sufficiently high prices to enforce demand destruction to prevent inventories from falling below critical levels.

In the oil market, when supply suddenly decreases sharply (such as the assumed 15% of global demand, or 15 million barrels per day), inventories alone are insufficient. At this point, prices must soar to a level high enough to cause consumers and businesses to cut back spending (e.g., reduce driving, shut down factories, switch to alternative energy sources).

According to Goldman Sachs’ sensitivity analysis, the possible range for the average oil price in March is as follows:

Analysts warn that the longer the disruption lasts and the lower the market’s tolerance for inventory declines, the faster demand destruction must occur, and the higher the peak oil price needs to be. In the most extreme scenario (120 days of disruption + rapid demand response), short-term prices could reach $140 per barrel. If Hormuz flows remain low throughout March, oil prices could even surpass the 2008 record highs.

Policy intervention: SPR releases could offset half of the inventory shock

Faced with an unprecedented supply gap, global policy responses are also significant. Goldman Sachs estimates that the combined release of approximately 254 million barrels from strategic petroleum reserves (SPR) worldwide, plus 31 million barrels of in-transit Russian crude, could reduce the impact on global commercial inventories by nearly 50%—from 617 million barrels down to 332 million barrels.

However, policy tools have constraints. In the baseline scenario (Hormuz flows resume from March 21), Goldman Sachs believes IEA member countries will not release the full 400 million barrels of authorized SPR. Reasons include:

The logistical release rate of OECD SPR is limited to about 3 million barrels per day;

The phased release plan is expected to conclude within four weeks, by early June—by which time WTI prices may have fallen back to just over $70;

The IEA emergency stockpile currently stands just above 1.2 billion barrels, already at a low level, with further large-scale releases constrained.

It’s worth noting that in scenarios of 30 days or longer of disruption, the OECD SPR release could reach or even exceed the 400 million barrel limit, significantly reducing policy buffers.

For asset allocators, the core contradiction is: the baseline scenario remains manageable (Q4 Brent at $71), but the costs of tail risks are extremely high. If the blockade extends to 30 or 60 days, prices will follow a nonlinear upward trajectory, impacting inflation expectations, energy stock valuations, and macro policy paths systematically.

Until the situation clarifies, March oil prices will be supported by large risk premiums—markets are using today’s high prices to hedge against potentially larger future shortfalls. Any signals of a quick resolution to the conflict will be the strongest downward catalysts; conversely, any news of prolonged blockade suggests the upside is far from capped.

Goldman Sachs analyst Daan Struyven has raised the Q4 Brent forecast from $66 to $71 per barrel, and the WTI forecast from $62 to $67.

Risk warning and disclaimer

Market risks exist; investment should be cautious. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions herein are suitable for their particular circumstances. Investment is at your own risk.