Crude oil prices continued their upward trajectory on Monday, with Brent crude soaring to $107, significantly above its year-to-date low of $55. The West Texas Intermediate (WTI) also crossed the $100 mark, driven by ongoing geopolitical tensions between the US and Iran. Analysts warn that the price surge could intensify if the US-Iran ceasefire collapses, potentially leading to a full-scale conflict that disrupts Middle East oil infrastructure.
Goldman Sachs has revised its oil price forecasts upward, predicting Brent crude will hit $90 a barrel in Q4 2026 and WTI $83, citing a massive 9.6 million barrels per day (bpd) deficit in the global oil market for Q2 2026. The investment bank attributes this to reduced output from the Middle East, particularly due to disruptions in the Strait of Hormuz. Goldman expects the normalization of Gulf exports through the strait by end of June, a delay from previous mid-May projections.
The global oil market faces a record draw on inventories, estimated at 11-12 million bpd in April, as 14.5 million bpd of Middle East crude production losses take effect. Goldman Sachs analysts led by Daan Struyven noted that extreme inventory draws are unsustainable and could require even sharper demand losses if the supply shock persists. Global oil demand is expected to fall by 1.7 million bpd in Q2 2026 and 100,000 bpd over the full year due to rising refined product prices.
The breakdown of US-Iran peace negotiations has eliminated the immediate prospect of energy supply normalization through the Strait of Hormuz, further tightening the market. Warren Patterson, head of commodities strategy at ING Economics, stated that the lack of progress means prices must reprice higher to incentivize demand destruction. Meanwhile, Iran has proposed reopening the strait while postponing nuclear negotiations, but US actions, including seizing a sanctioned Iranian oil tanker and tightening sanctions on Iran's shadow fleet, continue to pressure prices upward.
On the technical side, Brent crude has formed a bullish morning star candlestick pattern on the weekly chart and remains above all moving averages. Analysts suggest that unless Iran agrees to talks, the price could rise to $110, with potential further gains to $115.
