Goldman Sees ICE Brent Holding Summer Gains as SPR Buffer Thins and Red Sea Disruption Persists
Goldman Sachs expects ICE Brent to hold most of its July rally through August as strategic reserve releases slow and Red Sea shipping disruption continues.
ICE Brent crude front-month was trading at $87.81 per barrel on Monday (2026-07-27), up 2.76% on the session but roughly $12 below the $100 it briefly touched on Thursday (2026-07-23). Goldman Sachs expects prices to hold most of those recent gains through August, pointing to declining global inventories, reduced Middle East production, seasonal travel demand, and a significant slowdown in US strategic petroleum reserve releases.6
The $100 print on Thursday (2026-07-23) came after Yemen's Houthis reported striking two Saudi oil tankers, widening disruption to shipping through both the Red Sea and the Strait of Hormuz and lifting Brent to its highest in nearly two months. The sell-off since suggests some of that move reflected positioning around the specific attacks rather than a shift in underlying supply balances. Goldman's case for sustained prices through August rests on fundamentals that preceded the Thursday (2026-07-23) spike.6
Middle East crude production fell by more than 11 million barrels per day in May compared with pre-conflict levels, as limited shipping traffic through the Strait of Hormuz constrained flows, according to the EIA. The agency's June 2026 Short-Term Energy Outlook assumed the strait would remain effectively closed near term, with shipments resuming during the third quarter. The Houthi strikes on Thursday (2026-07-23) suggest that schedule is slipping.4
Earlier data told a similar story. Commerzbank FX and commodity analyst Norman Liebke, writing in June (2026-06-08), cited data showing a decline in daily global oil production of approximately 10.5 million barrels per day in March. "Oil inventories are lasting longer than expected," Liebke said, "even though inventories of some oil products have already fallen significantly."3
The US SPR has been the main offset to that production gap, and its remaining capacity sits at the center of Goldman's call. Washington committed to releasing 172 million barrels on a loan basis, with single-week releases peaking at nearly 10 million barrels at the height of the drawdowns. Total US crude and petroleum exports hit a record 12.9 million barrels per day, with crude-only exports briefly reaching 6.4 million bpd. SPR stocks had fallen to approximately 365 million barrels as of late May (2026-05-29), the lowest since mid-April 2024, constraining any further large-scale releases.2
Fewer government barrels entering the market removes an offset that has capped prices since the conflict began. Goldman's inventory drawdown thesis depends on SPR releases staying slow through August, with the underlying production shortfall then showing up in storage data.6,2
OPEC+ complicates the picture. The group raised output for a fifth consecutive month through early July (2026-07-06), and Saudi Arabia simultaneously cut official selling prices to Asia by the largest margin in more than two decades. Analysts described the move as market-share defense against cheaper Russian and Iranian crude, not a signal of demand strength.5
Earlier price swings show how quickly positioning can unwind. ICE Brent front-month was trading at $107.83 on Thursday (2026-05-14) before sliding to $93.73 on Friday (2026-05-29), as traders priced in signals of possible Hormuz reopening. Standard Chartered noted heavy algorithmic selling at that point despite Washington's rhetoric on Iran remaining aggressive. Prices fell further toward multi-month lows before the July (2026-07) recovery.1,2
At $87.81, Brent sits well below May's peak but above the trough that preceded the July (2026-07) Houthi-driven rally. Goldman's expectation of holding most of the recent gains implies a floor near current levels through August, though the bank has not specified a precise target in available material.6
NYMEX RBOB gasoline front-month fell 4.53% on Monday (2026-07-27), a sharp drop for peak-summer driving season that cuts against the demand side of Goldman's argument and warrants close attention as the week progresses.
The EIA's June forecast assumed Hormuz shipping would resume during the third quarter, which has now started. The Houthi strikes on Thursday (2026-07-23) on Saudi tankers suggest that schedule is under pressure. Every week of continued closure extends the production shortfall underpinning Goldman's inventory case; every week also accumulates the OPEC+ barrels that would build quickly in storage if the strait reopens ahead of expectations.4,6,5