President Donald Trump declared, "The Deal with the Islamic Republic of Iran is now complete," and told the world's tankers to "start your engines" on Sunday. Goldman Sachs responded by cutting its crude forecast.

The bank now sees Brent crude averaging $80 a barrel in the fourth quarter of 2026, down from $90, and $75 across 2027, down from $80. It cut its West Texas Intermediate forecasts to $75 and $70 over the same windows.

But Goldman's oil forecast is sending a more cautious signal than the headline.

One Month Forward, Ten Dollars Off

Goldman now assumes Persian Gulf exports normalize to pre-war levels by the end of July rather than the end of August.

Pulling that recovery forward by one month cuts the fair value of crude by about $10 for the fourth quarter and $5 for 2027, the bank said.

Nothing else in the model changed, and here is why it matters.

Oil prices track inventories with a near-linear relationship, so a faster return of supply drains the war premium more quickly, even if the barrels are not physically flowing yet.

The unwind so far is partial. Estimated flows from Persian Gulf countries have climbed from less than 30% of normal levels in early March to nearly 50% in mid-June, according to Goldman's tracking.

Gulf flows have already risen to around 11 million barrels a day. Reaching pre-war levels needs roughly 12 million more through Hormuz, which would lift volumes through the chokepoint to just 70% of where they ran before the war.

Capacity is not the bottleneck. Goldman estimates empty tankers inside the strait or within five days of navigation can load 860 million barrels, enough to cover more than 40 days of normal Hormuz exports.

Two-Sided Risk, Tilted Up

Goldman Sachs analyst Daan Struyven described the outlook as carrying "two-sided but still net upside price risks."

In a bullish scenario, the bank said Brent could climb above $130 in late 2026 and average $105 in 2027 if Hormuz stays disrupted and Gulf exports recover only gradually.

In a bearish scenario, Brent could average just under $70 in the fourth quarter and just under $60 in 2027, driven by faster supply growth and stickier demand losses.

Struyven warned the recovery could still falter, noting Iran "might effectively close the Strait again even after re-opening," for instance, if detailed nuclear talks fail.

Goldman flagged that the 14 million-barrel-per-day hit to Mideast liquids production is the sharpest oil supply shock on record, yet the second-quarter global deficit is tracking at a smaller 5 million barrels per day, thanks to flexible demand, particularly from China.

Looking further out, the bank expects a large 3.2 million-barrel-per-day surplus in 2027 but still forecasts resilient prices, supported by a structural global stockpiling trend of more than 1 million barrels per day and a security premium that keeps a floor under the market.

The Hormuz Oil Trade Crumbles

The forecast landed as crude extended its slide on Tuesday.

Brent fell about 4% to trade near $80 a barrel, while WTI dropped to $77, both reaching the lowest levels in over three months.

Trump said over the weekend that oil "will flow" through the Strait of Hormuz once the deal is signed on Friday.

Oil-tracking funds reflected the pressure. The United States Oil Fund LP (USO), which tracks WTI, and the United States Brent Oil Fund LP (BNO) both moved lower alongside the benchmarks.

The Energy Select Sector SPDR Fund (XLE) was the worst-performing sector on Monday, down 3.5%, and is falling by a further 0.8% during Tuesday's premarket trading.