Oil’s war premium just got served a big haymaker on June 12, following reports that U.S. and Iranian officials had agreed on a peace-deal text, according to The Washington Post.
Naturally, that raised hopes that the Strait of Hormuz could reopen, a major artery for global oil supplies.
Traders expected the Iran conflict to keep crude elevated, especially given Hormuz’s role in nearly one-fifth of global oil and gas flows.
However, according to Yahoo Finance reporting, Brent settled down 3.4% at $87.33, while WTI fell 3.2% to $84.88, as diplomacy suddenly looked more powerful than disruption.
That’s when Goldman Sachs added a new wrinkle.
According to a Reuters report, the bank’s latest oil forecast suggests the market may be focusing too much on the current war shock and not enough on what could follow.
That raises the question for investors: will oil’s next big move be driven by conflict or by something the market has been slow to price in?
What Goldman Sachs changed in its oil forecast
Goldman Sachs analysts were always of the opinion that the oil market remains vulnerable to a fleshed-out supply shock from the Iran war and Strait of Hormuz disruptions.
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That view still stands, and the bank kept its Q4 2026 Brent crude forecast at $90 a barrel, underscoring ongoing fears over geopolitical risk supporting prices.
The change is further out.
Goldman lowered its 2027 average Brent forecast to $80 a barrel, down by $5. That revamp suggests that the bank doesn’t see the current war premium turning into a lasting oil-price surge.
The reason is that the market has shaken out.
Goldman pointed to stronger supply from the U.S., Brazil, Guyana, Venezuela and the UAE, along with weaker demand tied partly to China’s shift toward electric vehicles.
The bank also said some demand damage may stick, saying it assumes “just over 10% of the demand weakness persists”.
Goldman is now saying the bigger 2027 risk may be oversupply and weaker demand.
Additionally, the physical market still remains tight, which is why Goldman is not calling for oil prices to start tanking.
According to reporting from Investing, U.S. crude inventories dropped by 7.2 million barrels to 426.5 million, nearly 5% below the five-year average, while distillates sat 13% below normal.
So if Hormuz reopens, prices can ease, but thin inventories leave crude exposed to another sharp spike if diplomacy falls through.
Why the Strait of Hormuz still matters for crude prices
The Strait of Hormuz remains the pressure point in the oil market, as it is tied to about one-fifth of global oil and LNG supply.
When traders believe the route can reopen, the war premium fades quickly.
Though we’re already seeing the effects of that premium fade with a likely peace deal, the risk has not disappeared.
U.S. officials said millions of barrels a day are still moving with military support, while Reuters reported that Hormuz disruptions have severely reshaped global energy flows.
In fact,Exxon CEO Darren Woods recently said that,
“One of these supply sources will become exhausted as the conflict goes on,” Woods said, adding that “there’s more to come if the strait remains closed.”
So if Hormuz normalizes, supply growth and weaker demand can pressure prices. If talks fail, tight inventories and restricted flows could send crude sharply higher again.
The key numbers behind the oil price reset
- Goldman lowered its 2027 average Brent crude forecast to $80 a barrel, down by $5, while keeping its Q4 2026 Brent forecast at $90. That signals near-term risk remains, but the longer-term spike case has weakened.
- The bank’s earlier forecast path had shifted several times. In March, Goldman raised its Q4 2026 Brent price to $71 from $66, then lifted it again in late April to $90 as Middle East supply risks worsened.
- Oil prices reacted quickly to hopes of a peace deal. Brent settled at $87.33, down 3.37%, while WTI fell 3.23% to $84.88.
- The expected supply loss has also narrowed. Traders initially feared 12 million to 15 million barrels per day of Gulf exports could be lost, but current estimates are closer to 5 million to 6 million barrels per day, according to Yahoo Finance.
- Inventories remain tight, with U.S. crude stocks 5% below the five-year average.
What the forecast means for investors
Goldman’s reset changes the oil trade from a simple war-premium story into a positioning problem.
If crude prices keep easing, that could lower inflation pressure and support rate-sensitive parts of the market, including growth stocks, tech, and AI names.
Lower energy costs can also help airlines, transport, retailers, and other consumer-facing companies that are sensitive to fuel and input costs.
On the flipside, a lower 2027 oil path could pressure energy stocks if investors start pricing weaker demand and rising supply instead of geopolitical scarcity.
That would shift money away from producers and toward sectors that benefit from cheaper crude.
The bigger risk is volatility.
If the Strait of Hormuz talks fail, tight inventories could quickly bring back the oil spike trade and revive inflation fears.
Related: Bank of America warns stock market may face a 1994-style shock
