Geopolitical tensions, including the blockade of the Strait of Hormuz and conflict in the Middle East, have led Goldman Sachs to project that the average price of Brent crude will exceed $100 per barrel in March. However, the firm also cautioned that prices may gradually decline in the second half of the year.

In a report issued on Friday, Goldman Sachs stated that due to the Iran conflict, damage to energy infrastructure in the Middle East, and disruptions to shipping through the Strait of Hormuz, the average price of Brent crude in March is expected to surpass $100 per barrel, before falling to an average of $85 in April.

Despite upward pressure on oil prices in the short term, Goldman Sachs maintains a relatively cautious outlook for the full year. Provided that disruptions to oil flows do not worsen, Brent crude prices are projected to gradually decline to the lower $70 range by year-end.

At the time of reporting, Brent crude futures were trading at $100.13 per barrel, with a weekly gain of approximately 8%. Earlier in the week, prices briefly reached $119.50 per barrel, the highest level since mid-2022, as market volatility intensified amid ongoing geopolitical conflicts and growing concerns over energy supply disruptions.

Goldman Sachs noted on Friday that since the U.S. and Israel initiated military action against Iran on February 28, the Strait of Hormuz has been effectively closed. This shipping lane carries about one-fifth of the world’s oil and natural gas supplies, and its disruption poses a direct and significant impact on global energy markets.

According to Goldman Sachs estimates, if the closure of the Strait of Hormuz persists for two months, Brent crude could surge to $93 per barrel, more than 30% above the baseline target of $71.

Analysts suggest that this scenario highlights the potential upside pressure on oil prices from current geopolitical risks.

Despite near-term price strength, Goldman Sachs remains cautious about the full-year price trajectory. The bank expects Brent crude to gradually retreat to the lower $70 range by year-end, assuming no further deterioration in oil flow disruptions.

However, the firm also highlighted upside risks: if supply disruptions last longer than expected, oil prices could reach higher peaks and remain elevated through the end of the year.

This marks the latest in a series of recent upward revisions to oil price forecasts by Goldman Sachs.

Just the day before, the bank raised its average Brent crude price forecast for the fourth quarter of 2026 from $66 to $71 per barrel. It also increased its fourth-quarter forecast for WTI crude from $62 to $67 per barrel, matching the adjustment made for Brent.

In a previous analysis, Goldman Sachs indicated that if flows through the Strait of Hormuz remain depressed through late March, oil prices would trend upward during that period "until the market becomes confident that prolonged disruptions are unlikely."