Goldman Sachs raises its fourth quarter oil price forecast, assuming that the disruption of shipping in the Strait of Hormuz will last longer.

Goldman Sachs analysts raised their fourth quarter oil price forecast in a report on March 11, citing the assumption that the disruption in shipping through the Strait of Hormuz will last longer. They forecast Brent crude futures to be $71 per barrel in the fourth quarter, higher than the previous forecast of $66; and WTI crude futures to be $67 per barrel, higher than the previous forecast of $62. The price forecast was raised based on a new assumption: that oil shipments through the Strait of Hormuz will only be at 10% of normal levels and last for 21 days, compared to the previous assumption of 10 days followed by a gradual recovery lasting 30 days. Goldman Sachs stated that if shipments remain low until March 20, oil prices may continue to rise during this period "until the market is convinced that a long-term disruption is unlikely". If oil transportation through the Strait of Hormuz remains low throughout March, oil prices could surpass the peak reached in 2008. Goldman Sachs believes that the risk of oil prices fluctuating in both directions still "leans towards the upside". If shipping is disrupted for 30 days, they expect the average price of Brent crude in the fourth quarter to be $76 per barrel and WTI crude to be $72 per barrel; if disrupted for 60 days, the prices would reach $93 and $89 respectively.