Goldman Sachs is sounding the alarm on one of the most important chokepoints in global energy markets. The bank’s commodities team warns that renewed military tensions around the Strait of Hormuz could keep Middle Eastern oil supplies well below their historical norms.

What’s happening in the Strait

The Strait of Hormuz typically handles roughly 20 million barrels per day of oil and LNG shipments. That’s about one-fifth of all global oil flows.

In 2025, Saudi Arabia, Iraq, and the UAE collectively exported around 13.1 mb/d through the strait.

A fragile agreement known as the Islamabad Memorandum was reached in June, aimed at restoring oil supply lines following a period of conflict. Renewed attacks on July 6-7 targeted at least three commercial vessels transiting the strait, prompting US military strikes against more than 80 Iranian targets and the reimposition of sanctions on Iranian oil exports.

Goldman’s commodities research co-head Daan Struyven and his team now project that oil flows through the strait may stabilize at only 70% of pre-war levels, even with partial recovery efforts underway.

The bank estimates that even accounting for partial pipeline offsets of approximately 4.2 mb/d, a sustained closure scenario could push oil prices higher by anywhere from $1 to over $15 per barrel. In the worst case, Goldman sees crude potentially soaring to between $100 and $150 per barrel.

The bigger picture for markets

Goldman’s projection that flows may cap at around 13 mb/d, well below the strait’s normal throughput, suggests this isn’t a temporary blip. Infrastructure damage and the ongoing risk of further military engagement mean that even optimistic recovery scenarios leave a meaningful supply gap.

Higher energy prices squeeze miner margins for proof-of-work mining operations, potentially accelerating capitulation among less efficient operators.