Goldman Sachs Breaks News: US-Iran Conflict Sparks the "Largest Energy Disruption in History"! Oil prices surpass $100—Is this just the beginning?

Source: Huitong Network

Huijin Finance APP News—Goldman Sachs Research released a report titled “Iran Conflict: How Long, and How Bad?” last Friday (March 20). Through interviews with geopolitical experts, former U.S. military generals, and internal Goldman analysts, it provides an in-depth analysis of the largest energy supply disruption in history triggered by the U.S.-Iran joint strikes, as well as the conflict’s duration, economic impact, and market effects.

The report emphasizes that the U.S.-Iran conflict has brought shipping through the Strait of Hormuz to near-standstill, with regional energy infrastructure damaged, and there are currently no signs of an end. Iran views this as a battle for survival, while the U.S. needs to control the strait to claim victory.

Analysis of the conflict’s duration

Citing the views of multiple experts, Goldman Sachs believes the conflict will be difficult to end in the near term. Sanam Vakil, Director of the Middle East and North Africa Programme at Chatham House, said: “At present, all evidence indicates the conflict will continue—Iran has not sent any signals of hope to end it, and the U.S. has not achieved a victory it can claim.” Iran hopes to obtain assurances such as sanctions relief through delay.

Dennis Ross, a senior fellow at the Washington Institute for Near East Policy and a former U.S. coordinator for the Middle East, said the war could last for another few weeks. If the U.S. controls the Strait of Hormuz, it could weaken Iran’s conventional threat capabilities by at least five years, but as long as Iran controls oil exports, the U.S. cannot claim victory. There is a possibility of mediation, but the conditions are not yet mature.

Kevin Donegan, a retired U.S. Army lieutenant general and former commander of the Fifth Fleet, believes the U.S. military has essentially achieved its goals of weakening Iran’s missiles, drones, and navy, but without ground forces, it is hard to achieve regime change. Escort operations can ensure some navigation safety, but at most they can restore 20% of oil flow; a full recovery would require Iran to offer incentives and build trust.

The Trump administration has repeatedly said the conflict will last 4–6 weeks, but political pressure could limit the duration.

Assessment of the energy supply shock

The report states that this is the largest energy supply disruption in history: oil flows through the Strait of Hormuz have plunged from normal 20 mb/d to 0.6 mb/d (down 97%), and the global one-off supply shock is 17.6 mb/d (17% of global supply). The price of Brent crude has broken above $100 per barrel, up about 50% compared with before the conflict.

On the natural gas side, the TTF benchmark price rose to €61/MWh (up 90%); if the conflict extends, it could reach €100/MWh. Goldman’s commodities research team (Samantha Dart, Daan Struyven, Alexandra Paulus) analyses show that refining products (such as diesel and jet fuel) saw higher price gains than crude oil, indicating that downstream shocks are more severe.

Global economic and market impact

Goldman Sachs’ global economics research team noted that every 10% rise in oil prices will drag down global GDP by more than 0.1%, lifting the global CPI by 0.2 percentage points (with greater impact on Asia and Europe). The current 3-week disruption has already caused a 0.3% drag on global GDP and increased inflation by 0.5–0.6%. If it lasts 60 days, the GDP drag could reach 0.9%, and inflation could rise by 1.7%.

Kamakshya Trivedi, head of market research, believes that assets are currently priced for an inflation shock, but not fully priced for a growth shock. If the disruption lasts longer, growth risk will become the “next shoe to drop.” U.S. Treasury yields at the front end are moving higher (the U.S. 2-year rises by 20–30bp), the dollar strengthens, and the euro and Asian currencies face pressure.

Goldman Sachs has cut its forecast for global economic growth in 2026, raised its inflation expectations, and pushed back the timing of Federal Reserve rate cuts to September or December (terminal rate 3–3.25%).

Regional economic impact

Farouk Soussa, head of economic research for the Middle East and North Africa, warned that Gulf Cooperation Council (GCC) countries have been severely hit: non-oil GDP could fall by 2–12% (up to 12% for Kuwait), and oil revenues are lost by about $700 million per day.

Overall economic contraction could exceed any period over the past 30 years, even more than the shock from the COVID-19 pandemic, and may leave long-term scars that affect economic diversification and investor confidence.

Outlook for post-crisis scenarios

Base-case scenario (gradual recovery): Strait flows recover within one month; Brent crude falls to $71 per barrel in Q4 2026 (9 dollars lower than the no-conflict scenario); global GDP drag of 0.3–0.5%; inflation up 0.5–0.9%.

Upside risks (prolonged disruption): With a 60-day disruption, the average Brent crude price could reach $93 per barrel; in an extreme scenario (production losses of 2 mb/d), Q4 2027 could reach $110 per barrel, with global growth and inflation risks significantly amplified.

Downside risks: Faster recovery or OPEC spare capacity may offset some of the impact, but overall risk tilts toward higher oil prices and lower growth.

(Brent crude continuous daily chart, source: Easy Exchange)

Editor’s summary

Goldman Sachs’ report emphasizes that the Iran conflict has triggered the largest energy supply disruption in history, that it will be difficult to end in the short term, and that the economic impact has expanded from an inflation shock to a potential growth drag. The reality of Brent crude trading above $100 per barrel, compared with the $71 per barrel level in the base case, highlights how uncertainty about the duration of the disruption plays a key role in the global economy and markets.

The Gulf region faces the most severe blow, while developed economies need to deal with the dual pressures of inflation and growth. Overall, the persistence of the conflict will be the core variable determining the global macro outlook, and investors should closely track developments in the Strait of Hormuz and progress on diplomatic negotiations.

At 15:24 Beijing time, Brent crude continuous trading is currently quoted at $102.26 per barrel.

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Responsible editor: Liu Wanli SF014