Oil Prices Rise Amid Heightened Volatility
Oil prices moved higher in volatile trading on Monday, staying close to recent highs after President Donald Trump issued a 48-hour ultimatum demanding that Iran reopen the Strait of Hormuz.
Brent crude futures rose 0.6% to $112.91 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 0.8% to $99.05 per barrel during early trading.
Markets Focus on Supply Disruptions
Investor attention remains centered on global supply risks linked to the Iran crisis. The United States and its allies are exploring ways to offset disruptions, including a temporary 30-day waiver allowing the purchase of Iranian oil already in transit.
Meanwhile, International Energy Agency chief Fatih Birol warned that the current situation could surpass the severity of the oil crises seen in 1973 and 1979.
Trump’s Ultimatum Escalates Tensions
Over the weekend, President Trump warned that Iran must reopen the Strait of Hormuz within 48 hours or face potential U.S. strikes targeting key energy infrastructure.
In response, Iran threatened to escalate further by fully shutting down the strategic waterway and targeting energy and water facilities across neighboring Gulf states. Reports also indicated renewed Iranian strikes on Israel early Monday.
Strait of Hormuz Disruption Drives Oil Surge
The Strait of Hormuz has remained largely blocked since the conflict began in late February, severely disrupting global oil flows. Approximately 20% of the world’s oil supply passes through this critical shipping route, making it a key chokepoint for global energy markets.
Oil prices had already surged to nearly $120 per barrel earlier in March and continue to trade near elevated levels as concerns over prolonged supply disruptions persist.
Goldman Sachs Raises Oil Price Forecast
Goldman Sachs has increased its oil price outlook for the second time in two weeks, citing growing structural risks to global supply caused by the ongoing Middle East conflict.
The bank now expects Brent crude to average $110 per barrel in the March–April period, up from its previous forecast of $98.
Prolonged Supply Constraints Expected
Analysts at Goldman Sachs estimate that oil flows through the Strait of Hormuz could remain at just 5% of normal levels for up to six weeks, followed by a gradual recovery over the following month.
This extended disruption is likely to keep a significant risk premium embedded in oil prices.
Long-Term Oil Outlook Revised Higher
Looking ahead, Goldman Sachs has also revised its longer-term projections. Brent crude is now expected to average around $85 per barrel in 2026, up from $77, while WTI is forecast to average $79 per barrel, compared to the previous estimate of $72.
