Goldman Sachs Says Oil Could Surpass $120 a Barrel if Hormuz Disruptions Don't Ease. Here's What That Means for Oil Stocks.

Goldman Sachs projects Brent crude could surge past $120 per barrel in Q4 2026 if Strait of Hormuz disruptions continue, with prices averaging $100 per barrel through 2027. The forecast hinges on whether tensions between the U.S. and Iran escalate or subside in the critical shipping chokepoint.

The firm's base case assumes de-escalation, with Brent averaging $80 per barrel in Q4 2026 and sliding to $75 in 2027. The divergence between scenarios—a $45 spread at the peak—creates wide variance for energy equity valuations over the next two years.

Major integrated producers Chevron and ExxonMobil stand to benefit under either scenario, though the $120 path would dramatically amplify free cash flow generation and shareholder return capacity. Both companies derive significant margin leverage from crude price moves above $80, where capital discipline and buyback programs accelerate.

The Hormuz wildcard adds geopolitical premium back into the crude curve after months of range-bound trading. Goldman's dual-scenario framework underscores how binary the setup has become: sustained disruption rewrites the energy trade for 2026-2027, while resolution pulls forward the return to mid-$70s equilibrium.