$110 oil and $900 gas? Looming global fallout of Hormuz Strait crisis
Photo: Oil prices could spike (Getty Images)
An investment bank predicts that the potential blockade of the Strait of Hormuz by Iran could trigger a sharp rise in oil and gas prices, informs Reuters.
Goldman Sachs has stated there is a high probability of disruptions in oil and gas supplies through the Strait of Hormuz. According to the bank, if the strait were half-blocked for a month followed by a 10% reduction in flow for the next 11 months, Brent oil prices could temporarily surge to $110 per barrel.
After that, prices are expected to decline, with Brent averaging around $95 per barrel in Q4 2025, according to the bank’s analytical note.
Price spike amid attacks
On June 23, oil prices surged to their highest level since January ($78.5 per barrel for Brent) after the US joined Israeli strikes on Iran's nuclear facilities.
Goldman Sachs noted that futures markets are already pricing in a 52% chance of a Strait of Hormuz blockade. The bank obtained this estimate from the Polymarket platform, despite limitations in such forecasting models. This situation is raising concerns among market participants.
Potential disruption scenarios
Goldman outlines two possible scenarios involving a reduction in Iranian oil exports by 1.75 million barrels per day. In the first scenario, if supply resumes after six months, Brent could peak at $90 per barrel, then fall to $60 in 2026. In the second scenario, if production remains consistently low, Brent may also rise to $90, but later stabilize between $70–80 in 2026. This would result from falling global inventories and limited spare capacity.
Iran prepares decision
According to Iranian state broadcaster Press TV, the final decision on closing the Strait of Hormuz will be made by Iran's Supreme National Security Council. This statement came after US airstrikes and growing support for the measure in Iran's parliament.
Goldman Sachs believes that the economic interests of countries like the US and China will push them to prevent a prolonged energy crisis. Their economies need stability to avoid global shocks.
Impact on gas markets
Goldman also expects that the European gas market, including TTF, will begin pricing in a higher risk of supply disruptions. TTF prices could jump to €74 per MWh, equivalent to about $900 per 1,000 cubic meters.
Meanwhile, US natural gas prices are likely to remain relatively stable, due to high export capacity and low dependence on LNG imports domestically.
Consequences for Ukraine
Since the war began, Ukraine has been fully reliant on imports of gasoline and diesel fuel. The rise in oil prices has already led to higher prices at gas stations.
Additionally, Ukraine plans to import at least 4.6 billion cubic meters of gas this year. Currently, gas in Europe costs about $500 per 1,000 cubic meters.
