Following a US-led airstrike targeted at Iranian nuclear facilities, Iran’s parliament approved the closure of the strategically crucial Strait of Hormuz, a vital waterway for global oil shipments. The Strait of Hormuz is a narrow passage connecting the Persian Gulf to the Arabian Sea, handling around 20% of the world’s oil and 20% of global liquefied natural gas (LNG) trade. The waterway is crucial for the export of oil from major producers such as Saudi Arabia, Iraq, and Iran. This decision, if effected, could push global oil prices up from below $80 to $150 per barrel. But Goldman Sachs analysts have forecast Brent crude oil prices could hit $110 a barrel if the Strait of Hormuz is blocked, while HSBC analysts see prices topping above $80. Prices for Brent could average around $95 in the fourth quarter of 2025, Goldman Sachs said in a note dated June 22.
Their assumptions included oil flows through the critical waterway halving for a month and remaining down by 10% for the following 11 months. Oil prices on Monday jumped to their highest since January after Washington joined Israel over the weekend in attacking Iran’s nuclear facilities. Prediction markets, despite limited liquidity, reflect a 52% probability of Iran closing the strait this year, Goldman said, citing data from Polymarket. About a fifth of the world’s oil consumption passes through it. “While the events in the Middle East remain fluid, we think that the economic incentives, including for the U.S. and China, to try to prevent a sustained and very large disruption of the Strait of Hormuz would be strong,” Goldman Sachs said. HSBC in a note on Monday said that oil prices are set to rise on the higher probability of a closure, or other Iranian retaliatory actions following U.S. military strikes against Iran’s nuclear sites. If there is no disruption, prices should trend down by the fourth quarter as OPEC+ adds supply and demand drops, HSBC analysts wrote.
They forecast Brent at $67 in second and third quarter and at $65 from fourth quarter onwards, but sees upside risks.
Meanwhile crude oil prices fell 1% on Monday after touching a five-month high as markets tried to gauge the impact on transit of oil and gas via the Strait of Hormuz after U.S. airstrikes against Iran at the weekend. Brent crude futures were down 70 cents, or 0.9%, at $76.31 a barrel. U.S. West Texas Intermediate crude (WTI) fell 76 cents, or 1%, to $73.09. Earlier in the session, Brent and WTI touched five-month highs of $81.40 and $78.40 respectively, before seesawing between positive and negative territory throughout the European trading session. U.S. President Donald Trump said he had “obliterated” Iran’s main nuclear sites in strike over the weekend , joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself. Israel carried out fresh strikes against Iran on Monday including on capital Tehran and the Iranian nuclear facility at Fordow, which was also a target of the U.S. attack. At least two supertankers made U-turns near the Strait of Hormuz following U.S. military strikes on Iran, ship tracking data shows, as more than a week of violence in the region prompted vessels to speed, pause, or alter their journeys.
About a fifth of global oil supply flows through the strait. However, the risk of a complete shutdown is low, analysts have said. “A full blockade would hurt Iran as well, given its dependency on crude exports to Asia – but asymmetric attacks on ships or terminals remain a very real possibility,” said Fawad Razaqzada, market analyst at City Index. “There’s been no disruption to supply — yet. But the market knows all too well how quickly that could change,” Razaqzada said.
Iran, which is OPEC’s third-largest crude producer, said on Monday that the U.S. attack on its nuclear sites expanded the range of legitimate targets for its armed forces and called Trump a “gambler” for joining Israel’s military campaign against the Islamic Republic. Meanwhile, Trump expressed a desire to see oil prices kept down amid fears that ongoing fighting in the Middle East could cause them to spike. On his Truth Social platform, he addressed the U.S. Department of Energy, encouraging “drill, baby, drill” and saying, “I mean now.”
