Goldman Sachs: Hormuz Oil Flows May Recover to Only 70% After War, Maintaining Supply Risk Premium

The Quick Take

• Goldman Sachs projects Hormuz oil flows may recover to only 70% of pre-war levels after the US-Iran conflict ends
• Regional producers in the Gulf are already leaning on alternative supply routes to reduce Hormuz exposure
• A 70% Hormuz flow recovery implies a persistent oil supply risk premium even after a formal peace agreement

Goldman Sachs Group delivered a cautionary assessment of oil market normalization following the US-Iran conflict resolution, projecting that Strait of Hormuz flows may recover to only approximately 70% of their pre-conflict levels. The bank highlighted that Gulf producers have already begun routing crude through alternative pathways to reduce dependency on Hormuz transit, reflecting a structural adaptation that may persist even if a formal peace agreement is struck. This is a materially different baseline than a full supply restoration — at 70% recovery, oil markets would retain a residual risk premium above the fundamental supply-demand equilibrium price.

A sub-full Hormuz recovery has cascading implications across the oil value chain. At 70% flow normalization, global oil inventories would rebuild more slowly than anticipated, preventing the rapid price decline implied by a complete peace scenario and keeping Brent above the levels priced by traders betting on full Hormuz reopening. OPEC+ producers — particularly Iraq, Kuwait, and Iran itself — whose export routes pass through Hormuz would face persistent throughput constraints that Goldman's scenario implies cannot be fully offset by alternative routes. Energy-importing nations in Asia, which had anticipated meaningful cost relief from full Hormuz restoration, may see smaller-than-projected import cost reductions if Goldman's partial-recovery scenario proves accurate.

Watch the actual crude flow data through the Strait of Hormuz in the weeks following any formal agreement, with shipping trackers providing real-time visibility on throughput levels compared to the pre-war baseline. Goldman Sachs oil price forecasts will likely be revised in response to actual flow normalization — any upward revision to their Brent target would confirm the partial-recovery thesis is holding. The macro variable determining whether 70% recovery is the floor or ceiling is the pace of OPEC+ alternative route investment: if Gulf producers accelerate pipeline capacity to bypass Hormuz, the effective ceiling on Hormuz dependency could fall further, permanently restructuring oil geopolitics around the strait.

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