Oil traded slight below last week’s closing prices at the start of futures trading on Sunday, with roughly 24 hours to go on President Trump’s 48-hour ultimatum to Iran.
Futures prices on Brent crude (BZ=F), the international pricing benchmark, initially surged but quickly gave up gains in the minutes after the open on Sunday, trading around $106 per barrel. Those on US benchmark West Texas Intermediate crude (CL=F) changed hands around $97.90 per barrel.
In a post on Truth Social at 6:45 p.m. ET on Saturday, President Trump said Iran had 48 hours to “FULLY OPEN, WITHOUT THREAT, the Strait of Hormuz,” or else “within 48 HOURS from this exact point in time, the United States of America will hit and obliterate their various POWER PLANTS, STARTING WITH THE BIGGEST ONE FIRST!”
The threat by the US president comes after a week of attacks by the Iranian regime against energy infrastructure throughout the Gulf, including Qatar’s Ras Laffan LNG export terminal — the world’s largest such facility.
In a note to clients on Sunday evening, Goldman Sachs’ oil desk, led by head of oil research Daan Struyven, raised its price targets for oil, now looking for Brent to trade at $110 per barrel through March and April, up from a previous call for $98 per barrel over the same timeframe under the assumption that “Hormuz flows remain at only 5% of normal levels for a longer 6-week period before a gradual 1-month recovery.”
The bank is now assuming an average 2026 price of $85 and $79 per barrel, respectively, for Brent and WTI, up from previous estimate of $77 and $72 per barrel for the two benchmarks. In 2027, Goldman expects Brent and WTI to average $80 and $75 per barrel, respectively.
“In the short-run, the market is likely to require a growing risk premium to generate precautionary demand destruction to hedge against shortages in longer disruptions risk scenarios,” Goldman’s Struyven, Yulia Grigsby, and Alexandra Paulus wrote.
“A recognition of the risks from the high concentration of production and spare capacity is likely to lead to structurally higher strategic stockpiling and long-dated prices.”