Goldman Sachs CEO Warns Oil Prices Could Surge to $170 Amid Iran Tensions

TLDR

• David Solomon, CEO of Goldman Sachs, projects oil prices may climb to $80–$100 per barrel over the next three to six months
• In a worst-case scenario involving severe escalation with Iran, Solomon believes crude could surge to $170 per barrel
• On Tuesday, Brent crude decreased 0.5% to $94.95 while WTI declined 1.8% to $88.04
• The Strait of Hormuz has remained mostly blocked by Iran since hostilities commenced in late February
• Gulf states Saudi Arabia and UAE are redirecting oil flows through alternate routes, with combined export volumes reaching 6.5 million barrels daily

David Solomon, the chief executive of Goldman Sachs, projected on Tuesday that crude oil prices are likely to reach a range of $80 to $100 per barrel over the coming three to six months. Solomon delivered these remarks during an appearance at the Paley Center.

The Goldman executive further cautioned that should tensions with Iran intensify dramatically, barrel prices could skyrocket to as much as $170. Solomon assessed that U.S. recession risks remain relatively contained at present, though he emphasized the precarious nature of the situation, noting it could shift with a single social media post.

Oil prices retreated on Tuesday as traders digested conflicting reports regarding diplomatic negotiations between Washington and Tehran. A provisional ceasefire agreement is scheduled to lapse within days, though authorities have not disclosed the precise expiration time.

Brent crude contracts declined 0.5% to settle at $94.95 per barrel. U.S. West Texas Intermediate contracts fell 1.8% to close at $88.04 per barrel.

Brent Crude Oil Last Day Financ (BZ=F)

Crude had rallied strongly during the previous trading session following a weekend escalation in regional hostilities. U.S. forces intercepted and seized a vessel flying the Iranian flag, prompting Tehran to issue retaliatory warnings.

Tehran has once again closed the Strait of Hormuz to shipping traffic, reversing its Friday decision to reopen the critical waterway. Iranian authorities justified the closure by pointing to what they described as an active U.S. naval blockade along Iranian coastal waters.

Diplomatic Efforts Face Setback

President Trump stated Monday that the U.S. naval blockade would remain operational until a comprehensive peace agreement is finalized. The president indicated that fresh negotiations with Iranian representatives were anticipated this week, with an American delegation expected to travel to Pakistan on Tuesday or Wednesday.

However, Iranian leadership has publicly rejected additional negotiation rounds. Mohammad Bagher Ghalibaf, Iran’s Parliamentary Speaker and chief negotiator, declared that Tehran would not participate in discussions conducted “under the shadow of threats” emanating from Washington.

Multiple Iranian state-controlled media outlets have reinforced this stance. Nonetheless, conflicting reports suggest Iran has privately communicated to regional intermediaries that it will dispatch a negotiating team to Pakistan this week.

ANZ analysts wrote that “ongoing uncertainty continues to overshadow any peace agreement, as Iran remains reluctant to attend a second round of talks in Pakistan.”

Trump announced the two-week ceasefire on April 7 at 6:32 p.m. ET.

Strategic Waterway Remains Blocked

The Strait of Hormuz serves as a transit point for approximately 20% of global oil supplies. The vital chokepoint has been predominantly closed to shipping since military conflict erupted in late February.

While the initial price shock has moderated to some degree, crude oil valuations remain substantially elevated compared to pre-conflict levels.

Saudi Arabia and the United Arab Emirates have implemented contingency plans to bypass Hormuz entirely. Both nations are channeling exports through the Yanbu export terminal on the Red Sea coast and the Fujairah facility on the Gulf of Oman.

According to ANZ, aggregate loading operations at these two alternative terminals have expanded to 6.5 million barrels per day, representing a significant increase from the pre-war baseline of 5.0 million barrels per day.

With Iran’s ceasefire deadline rapidly approaching and no verified agreement in sight, markets remain on edge.

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