There's a narrow strip of water in the Middle East that most people never think about, but right now, it's calling the shots for the entire global oil market.

West Texas Intermediate crude is already up about 30% this year, trading around $75 a barrel. The reason? Traffic through the Strait of Hormuz—the vital shipping lane that handles about a fifth of the world's oil trade—has slowed to a crawl, choking off Middle Eastern exports.

But according to analysts at Goldman Sachs, the market might still be asleep at the wheel about how bad this could get.

In a note this week, Goldman's Daan Struyven laid out a stark warning: if the disruptions at the strait drag on, oil prices could rocket higher, with Brent crude potentially hitting $100 a barrel. This isn't just about a temporary price blip; it's about a fundamental squeeze that could force producers to turn off the taps.

When the Oil Has Nowhere to Go

Goldman's revised outlook starts with a simple, brutal fact of logistics: oil needs to go somewhere. Right now, with flows through the Strait of Hormuz estimated at just 15% of normal levels, it's going nowhere fast.

The bank assumes a scenario where these severely constrained exports continue for a bit before slowly recovering. Under that setup, Goldman estimates the disruption could wipe out about 200 million barrels of Middle Eastern production in March alone.

Here's the kicker, and it's all about storage. Once the export routes are blocked, the crude just starts piling up at the production sites. It's like a bathtub with the drain closed but the tap still on. Eventually, it overflows.

"We assume that 5 additional days of very low (15% of normal) Strait of Hormuz exports followed by a gradual recovery over 28 days will lead in March to large OECD inventories declines and 200mb of estimated Middle Eastern crude production losses as storage approaches congestion," Struyven said.

When the storage tanks get full, producers have no choice but to shut in their wells. Goldman figures the region has about 300 million barrels of spare storage capacity on land. That sounds like a lot, but it's only enough for 18 to 23 days of exports if the strait were fully closed.

So the production cuts start much sooner than you might think. Iraq, for example, is already cutting output by nearly 1.5 million barrels a day because it's running out of room to put the oil. Goldman estimates total production losses could peak at over 7 million barrels per day before things start to recover.

New Numbers on the Board

Given this looming squeeze, Goldman has officially moved its price forecasts higher. The bank now expects Brent crude to average $76 per barrel in the second quarter of 2026, up from a previous call of $66. Its forecast for WTI rises to $71 from $62.

For the near term, the bank thinks prices will likely trade in the mid-$80s during March as the market tries to weigh signs of a partial shipping recovery against the mounting evidence of those production losses.

Looking further out, Goldman expects the shock to eventually fade. The forecast sees Brent declining back to around $66 by the fourth quarter of 2026, as Hormuz flows get back to normal and global inventories start to rebuild.

Two things would pull prices back down: first, the gradual evaporation of what Goldman estimates is a $13-per-barrel geopolitical risk premium baked into the price. Second, a modest drop in the underlying "fair value" of oil as those inventories rise.

But, and it's a big but, the bank says the balance of risks is still skewed to the upside. Things could easily get worse before they get better.

The Road to $100 Oil

That brings us to Goldman's most eye-catching warning: the $100 scenario. If disruptions at the Strait of Hormuz persist for another five weeks, analysts think Brent prices could climb toward triple digits.

At that level, the oil market enters a different phase. It's called demand destruction. Prices get high enough, fast enough, that they actually start to suppress consumption. This acts as a safety valve, preventing global inventories from falling to critically dangerous lows.

Goldman pegs that critical inventory threshold at roughly 2.6 billion barrels of OECD commercial stocks, which was the low point hit during the energy shock of 2022.

The scary part is that beyond certain points, market dynamics can become "nonlinear." In plain English, that means things can spiral in unpredictable ways. Longer disruptions could delay the restart of production and amplify supply losses, potentially pushing prices even higher than traditional models would predict.

Is Energy Back in the Driver's Seat?

If this disruption sticks around, the bigger story might be a shift in leadership within the stock market itself.

For much of the past decade, the energy sector has been the wallflower at the party, overshadowed by the flashy tech and growth sectors. But years of underinvestment in new production, combined with rising geopolitical risks, have quietly tightened the entire global oil system.

That structural tightness is now meeting a moment of acute crisis. And the market is taking notice. So far in 2026, the Energy Select Sector SPDR Fund (XLE) is up 26%, handily outperforming the broader market.

A prolonged price spike driven by a supply chokehold could cement energy's return to the spotlight, reminding investors that sometimes, the oldest market forces—like geography and logistics—still have the final say.