Oil prices just had one of their wildest weeks in years, and nobody knows what happens next. Brent crude plunged nearly 11% on Monday after President Trump announced a five-day pause on strikes against Iranian energy infrastructure, saying the U.S. and Iran had productive talks about resolving hostilities in the Middle East.
That drop came just days after Brent topped $112 per barrel — its highest level in months — as the conflict escalated and Iran effectively shut down the Strait of Hormuz, the choke point that normally handles 20% of global oil supplies. Now Brent sits around $100, and traders are trying to figure out whether this pause is real or just a temporary breather before things get worse.
Goldman Sachs isn’t taking chances. The bank sharply raised its oil price forecasts on Monday, expecting Brent to average $110 in March and April — a 62% jump from the 2025 annual average. If Hormuz flows remain at just 5% of normal for 10 weeks, Goldman says daily Brent prices could exceed the 2008 record of $147 per barrel.
The head of the International Energy Agency called the situation very severe and worse than the two oil shocks of the 1970s and the Russia-Ukraine war combined. IEA member nations already agreed to release a record 400 million barrels from strategic stockpiles, and officials are consulting on releasing even more if necessary.
Iranian state media insists Tehran will allow safe passage through the strait for all shipping except vessels linked to Iran’s enemies — which doesn’t exactly inspire confidence. And while Trump says talks are productive, it’s still not clear when the Strait of Hormuz will actually reopen.
For energy investors, this is the kind of volatility that creates opportunity — but also risk. Oil could spike back above $110 if talks collapse. Or it could slide further if the Strait reopens faster than expected. Either way, families and businesses shouldn’t expect relief at the pump anytime soon. Even when the conflict ends, it could be weeks or months before energy costs normalize.
The Iran situation is a reminder that geopolitical risk is back in a big way. And oil traders are watching every headline.
