Goldman Sachs revamps oil price forecast on supply squeeze

Oil is the bloodstream of the global economy, and right now that bloodstream has a clot somewhere in the Persian Gulf.

Every cup of coffee, every Amazon delivery, every cross-country flight gets routed through a barrel of crude at some point along the way. So when the world's biggest investment banks start rewriting their oil math in the middle of a holiday weekend, your wallet is usually the last to know and the first to pay.

For two months, Wall Street has watched a Middle East supply shock rip through futures markets, push the U.S. national gas average past $4 a gallon for the first time since 2022, and feed straight into refined product prices that hit truckers, airlines, and home heating bills the same week. Crude does not stay in a vacuum. It travels.

Goldman Sachs just told clients that the bottom of this story has not arrived yet. In a note to investors dated April 26, the bank revised its fourth-quarter oil price forecasts higher once more, and the new numbers tell a far tighter story than even bullish energy traders were braced for.

Photo by Karl Hendon on Getty Images

What Goldman's new oil forecast actually says

Brent crude is now expected to average $90 a barrel in the fourth quarter, up from a prior call of $80, with U.S. West Texas Intermediate (WTI) set to average $83, up from $75, according to Reuters reporting on the Goldman note.

The fourth-quarter Brent number is "nearly $30 higher than before the Hormuz shock," wrote Goldman analysts led by Daan Struyven and Yulia Zhestkova Grigsby, according to Bloomberg.

Related: Goldman Sachs has a stark message on the S&P 500

The forecast assumes Gulf exports through the Strait of Hormuz normalize by late June, a slower recovery timeline than the bank had penciled in just weeks ago.

That backdrop matters. Roughly 14.5 million barrels per day of Middle East crude production has gone offline, and global inventories are now drawing down at a record 11 to 12 million bpd pace in April, according to the Goldman team's note as covered by OilPrice.com.

The bigger swing is in the supply-demand balance. What looked like a 1.8 million bpd surplus in 2025 is now projected to flip to a 9.6 million bpd deficit by Q2 2026, also according to Reuters. That is one of the largest single-cycle reversals the bank has flagged in years.

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Why the Hormuz oil supply squeeze is hitting your wallet

Crude does not show up at your house. Gasoline, jet fuel, and diesel do. Right now those prices are the squeeze most readers can actually feel.

The U.S. national average for regular gasoline sat at $4.02 a gallon as of April 23, according to AAA, up roughly 30% year-over-year. California drivers are paying close to $5.88, while drivers in Oklahoma still pay around $3.27.

I ran AAA's daily pump data against Goldman's revised barrel math, and the link is direct. Crude oil typically makes up about half the retail price of a gallon of gasoline, with refining margins, distribution, and taxes covering the rest, per the Energy Information Administration.

If Brent settles near $90 and refined product prices keep their Q2 premium, the AAA national average is structurally pinned above $4 for most of the summer driving season.

How big the Goldman oil supply revision really is

Goldman is not the only firm calling out a tighter market, but its numbers are now among the loudest on the Street. The note is the bank's latest in a series of upward revisions tied to the Strait of Hormuz, which typically funnels nearly 20% of global oil flows.

Here is how the revised picture stacks up against the prior base case:

• Q4 2026 Brent crude forecast: $90 a barrel, up from $80, per Goldman Sachs via Bloomberg
• Q4 2026 WTI crude forecast: $83 a barrel, up from $75, per Goldman Sachs via Reuters
• Global supply balance shift: from a 1.8 million bpd surplus in 2025 to a 9.6 million bpd deficit in Q2 2026, per Goldman Sachs viaReuters
• Middle East crude offline: roughly 14.5 million barrels per day, per Goldman Sachs via OilPrice.com
• April global inventory draw: 11 to 12 million bpd, a record pace, per Goldman Sachs via investingLive
• U.S. national gas average: $4.02 a gallon, up about 30% year-over-year, per AAA

The demand side does offer some cushion. Goldman expects global oil demand to fall by 1.7 million bpd in Q2 and by roughly 100,000 bpd over the full-year 2026. But that is nowhere near enough to plug the supply hole.

ING commodity analysts Warren Patterson and Ewa Manthey put the same point in plainer language. "There's little alternative to fill a roughly 13m b/d shortfall," they wrote in a note covered by OilPrice.com, adding that the lack of progress on Iran peace talks is tightening the market every day.

What higher oil prices mean for your portfolio and gas budget

Oil majors have a different read than the futures market, and the disconnect cuts to the heart of the Goldman call.

Chevron CEO Mike Wirth said the "physical manifestations of the closure of the Strait of Hormuz" are not fully reflected in oil futures prices, according to CNBC. He warned that even a reopening would not mean a clean restart, since rebuilding inventories and restarting shut-in wells takes months.

Related: Exxon, Chevron, big oil send signals ahead of earnings

Translation: the chief executive of one of the world's largest publicly traded oil producers thinks oil futures are too cheap for the supply reality.

When I look at how this re-rates energy stocks against the broader S&P 500, the math is uncomfortable for under-allocated investors. Goldman's previous Q4 base case implied a single-digit premium for major producers. The new $90 Brent target widens that cushion materially, and energy continues to outperform most growth sectors year-to-date.

For households, the practical play is shorter. Higher pump prices feed directly into airline fares, food costs, and freight-driven inflation, the same chain that pulled the Federal Reserve's December rate cut decision into a tighter range. If oil stays where Goldman now thinks it will, that pressure does not reset before the holiday driving season.

What investors should watch next on oil and energy stocks

Three signals will tell you whether the Goldman forecast is the floor or the ceiling.

First, watch Strait of Hormuz tanker traffic. Wirth has said even a reopening would not deliver a clean return to normal flows, with insurance premiums and naval-escort costs likely to keep freight rates elevated for months.

Second, watch refined product spreads. Goldman flagged unusually high refined product prices as the channel through which the supply shock leaks into your bills. If those spreads narrow, the inflation story softens. If they hold, the gas pump tells the rest.

Third, watch the next round of Iran peace talks. Goldman's forecast assumes Gulf exports normalize by late June. Each week without a deal pushes that base case further out, and the bank notes that risks remain skewed firmly to the upside.

The next time you fill up, the number on the pump tells you more than this week's commute cost. It tells you what Wall Street thinks is going to happen next in the Persian Gulf, and Goldman just turned the volume up.

Related: Wall Street just sent oil stocks a brutal message after Iran's move

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This story was originally published April 28, 2026 at 11:33 AM.