Oil prices edged lower on Friday but remained firmly above $100 per barrel, impacted by damage to Middle Eastern energy infrastructure and the continued near-total closure of the critical Strait of Hormuz. Goldman Sachs even projected that the high-price environment could persist until 2027.
The global crude benchmark, Brent crude, dipped 0.1% to $108.5 per barrel, after touching $110 during the session. U.S. crude was largely flat at $95.6 per barrel.
Analysts at Goldman Sachs wrote in a Thursday report, "The persistence of numerous large supply shocks in history suggests that if the conflict is prolonged and significant supply losses continue, the risk of oil prices remaining above $100 for an extended period will rise significantly."
This week, the spread between U.S. crude and Brent widened slightly as the Trump administration pushed for increased U.S. production. Analysts at Deutsche Bank noted on Friday that the United States, as the world's largest oil producer, has somewhat cushioned the shock from the Iran war but cannot be fully immune.
On Friday, Israeli Prime Minister Benjamin Netanyahu stated he would comply with President Trump's call to cease attacks on key Iranian energy facilities, causing Brent prices to fluctuate. Earlier Israeli strikes on Iran's South Pars gas field had triggered retaliatory Iranian strikes on the world's largest liquefied natural gas facility—Qatar's Ras Laffan port—driving a sharp price spike earlier in the week.
President Trump also sought to reassure Americans facing the highest gasoline prices in nearly two and a half years, stating that "the situation will be over soon." He added that before the U.S. and Israel went to war with Iran, he had expected oil prices to be "much worse."
According to data from the American Automobile Association (AAA), the U.S. national average gasoline price rose another 3 cents overnight on Friday to $3.91 per gallon, the highest level since October 13, 2022.
**Conflict with No End in Sight**
The conflict, now in its third week, shows no signs of abating. At dawn on Friday, multiple Middle Eastern countries reported intercepting drones and missiles.
The Strait of Hormuz—the narrow channel between Iran and Oman—has been effectively closed for 19 days, obstructing 20% of global oil supplies.
A senior Iranian security source told CNN on Thursday that the strait "will not return to its pre-war status" and reiterated a previous threat that the waterway would remain disrupted if Iran is attacked.
Given the strait has been nearly blocked for almost three weeks, Goldman Sachs expects oil prices are likely to continue rising. The bank warned that if supply disruptions are prolonged, the Brent benchmark could surpass the historic high of around $147 per barrel set in 2008.
Goldman Sachs calculated that in a worst-case scenario—where Hormuz oil supplies remain severely depressed for more than two months and post-reopening production stays at 2 million barrels per day—Brent prices could be around $111 per barrel by the fourth quarter of 2027.
Under a more optimistic scenario, where oil flows through the strait gradually resume starting in April, Goldman expects Brent prices to fall back to the $70s by the fourth quarter of 2026.
QatarEnergy has stated that missile attacks have reduced the country's LNG export capacity by 17%, with repairs potentially taking up to five years, affecting supplies to European and Asian markets.
**Governments Under Pressure to Lower Prices**
In response to high gasoline prices, the Trump administration is considering a range of measures.
Treasury Secretary Scott Bessent proposed lifting sanctions on Iranian oil already on the water to lower prices—a move that could indirectly fund the war efforts of America's adversary.
However, a government official told CNN that the White House has so far ruled out implementing a crude oil and natural gas export ban as an option to ease soaring energy prices.
As part of a historic emergency oil release plan agreed upon by the 32 member countries of the International Energy Agency earlier this month, the United States committed to releasing over 172 million barrels of oil from its strategic reserves.
President Trump has also publicly called on allies to support the reopening of the Strait of Hormuz.
A UK defense official stated that Britain has sent a small number of military planners to collaborate with the U.S. on developing a "viable collective plan." However, other U.S. partners indicated that deploying military assets to the strait is unlikely under the current hostilities.
