Goldman Warns of a “Largest Oil Crisis” Around $110—Then Sees Q4 Drop to $71, With Japan’s Rates Risking Crypto Liquidity

Goldman released an energy-focused report tied to the Hormuz Strait situation, framing it as a potential “largest oil crisis,” but not a permanent new regime. It expects the oil price to average about $110 in March–April, while its full forecast shows a sharper normalization in Q4, with Brent returning toward $71 (and a lower yearly average around $85). The article stresses that the $110 oil price “ceiling” is largely priced on assumptions that Hormuz risk remains elevated for roughly 6 weeks, then gradually recovers. If recovery happens faster (e.g., rapid diplomatic shifts after a deadline), $110 would act as a peak rather than a new baseline. Even with IEA agreeing to release up to 400 million barrels from strategic reserves, real release capacity is limited, and Goldman treats reserves more as a confidence buffer than a long-term supply fix. For crypto traders, the key macro channel is market liquidity. The report argues the shock is asymmetric: Asia absorbs most Hormuz imports (around 95%), while Europe/US inventories look better. Japan is highlighted as the “true victim” because 73.7% of its crude imports rely on Hormuz and there’s limited substitution. Japan’s 10-year bond yield is described as rising toward multi-decade highs, increasing pressure on carry trades (borrow JPY, invest in risk assets). That mechanism can tighten liquidity and worsen risk sentiment even if the oil price later mean-reverts. Net effect: the near-term oil price narrative may drive volatility, while Goldman’s $71 downside in Q4 suggests a recovery path—but with Japan-rate-driven liquidity risks making the overall bias toward risk-off.