The global crude oil market is quietly brewing a new round of shocks. Goldman Sachs has significantly raised its oil price forecast, warning that geopolitical tensions could disrupt supply, with Brent crude potentially reaching $140 per barrel in the most extreme scenario and remaining high until 2027. This is not alarmist—current prices already include approximately $27 of a "geopolitical premium," with the market preemptively pricing in potential supply disruptions from the Middle East. If the US-Iran conflict escalates, tanker attacks occur, or infrastructure is damaged, widening the supply gap, $140 will become a real possibility instead of an extreme scenario. For economies heavily reliant on imports, this means rising inflation and across-the-board cost increases. This article summarizes Goldman Sachs' latest assessment, triggering factors, and potential impacts to help you understand the true extent of the upside risks to oil prices.

Goldman Sachs significantly raised its forecast, with $140 as the most extreme scenario.

Goldman Sachs recently raised its December 2026 target for Brent crude oil from $90 to $105, and its 2027 average target from $80 to $88. More notably, in the extreme scenario of severe supply disruptions, oil prices could reach $140, averaging around $130 in 2027. This figure is not Goldman Sachs' core forecast, but rather represents an "upside risk" scenario. If a large-scale supply disruption occurs in the Middle East, the market will quickly repric. Currently, approximately $27 of oil prices already reflects a geopolitical risk premium; traders are paying additional costs for "potential supply disruptions." In other words, fear itself is already driving up prices.

Why are oil prices under continuous upward pressure?

The rise in oil prices is not due to a global "oil shortage," but rather a combination of geopolitical uncertainties. As a key global crude oil supply hub, the Middle East is highly susceptible to any escalation of tensions, which will quickly impact the market. The fluctuating US-Iran relations, security risks in shipping lanes such as the Red Sea, and potential damage to oil infrastructure are all key risks the market is focusing on. Goldman Sachs has already included a potential production cut of 1 million barrels per day in its 2027 supply forecast. If the actual disruption is larger or longer-lasting, the supply gap will widen rapidly, fully releasing price elasticity. Historical experience shows that real oil price shocks often begin with "anticipated disruptions" rather than actual shortages.

Potential triggers and chain reactions

Potential triggers for the next round of oil price shocks include: further escalation of US-Iran tensions, attacks on tankers and shipping routes, damage to Middle Eastern oil production facilities, and prolonged disruptions to global production. If these events occur simultaneously, existing inventory buffers could be quickly depleted. For countries with high import dependence, the impact will be more direct: rising gasoline and diesel prices, increased transportation and logistics costs, renewed inflationary pressures, pressure on their currencies, inflated import bills, and significant increases in costs for downstream industries such as aviation, chemicals, and coatings. Once prices break through key psychological barriers, market sentiment and actual supply and demand will create a positive feedback loop, potentially pushing prices higher than linearly expected.

The key point is not that "140 is inevitable," but rather that "the risk has already been priced in."

It's important to emphasize that Goldman Sachs' baseline scenario isn't $140; that's merely an extreme outcome of a significant supply disruption. Even without a substantial supply halt, the fear of disruption is enough to sustain high oil prices. The market is currently paying a premium for future uncertainty, and this "precautionary pricing" itself raises the benchmark level. The next oil price shock may not begin with a genuine shortage, but rather with a collective fear of one. For investors and related supply chains, the focus should be on marginal changes in geopolitical events and whether the supply disruption assumption is further reinforced. In summary, Goldman Sachs' upward revision isn't simply a bullish view on a tight supply-demand balance, but rather a clear inclusion of geopolitical risk premiums and supply disruption scenarios in its framework. The $140 level remains the upper limit reference under the most extreme scenario, but it's no longer far off. The market is pricing in potential shocks with real money. For economies heavily reliant on oil imports, assessing cost transmission and inflation risks in advance is more crucial than reactive measures. The next stage of oil price movements may depend on the next turning point in the Middle East situation.