Goldman Sachs Group Inc. warns that Brent crude could surge above $120 a barrel by the fourth quarter if shipping disruptions at the Strait of Hormuz continue, though the bank stresses this is not its baseline scenario.

The projection reflects heightened geopolitical risk premiums in the oil market, where any sustained closure or threat to the critical chokepoint would tighten global supply significantly. Goldman's analysts note that while the $120 level represents a tail-risk outcome, persistent instability could keep prices elevated well above current levels.

Market participants are closely monitoring the strait, through which roughly a fifth of global oil supply passes. The bank's base case assumes disruptions remain contained, but the elevated forecast underscores the fragility of energy markets amid ongoing regional tensions.