Goldman Sachs, in its latest flagship macro report "Top of Mind" published on March 20, warned that global assets have only fully priced in an "inflation shock" while completely ignoring the devastating impact of high energy costs on global economic growth. The report stated that the "deadlock" in the Strait of Hormuz suggests the conflict will be extremely difficult to resolve quickly. If market expectations prove false, a "growth slowdown (recession)" will be the second shoe to drop, leading to a violent reversal in global asset pricing. Given the risk of a prolonged crisis, Goldman Sachs has comprehensively lowered its 2026 growth forecasts for major economies like the US and the Eurozone, raised inflation expectations, and significantly delayed its projection for the next Fed rate cut from June to September. Notably, according to a March 22 CCTV News report, Iran's representative to the International Maritime Organization stated that Iran allows non-"enemy" vessels to pass through the Strait of Hormuz, provided they coordinate with Iran on security matters and make relevant arrangements.

Why is a quick victory unlikely? The "deadlock" in the Strait of Hormuz and the illusion of naval escorts. Goldman Sachs believes the core uncertainty of this conflict lies not in whether US forces can achieve tactical victory, but in when the "global energy choke point" – the Strait of Hormuz – can be reopened. In the report, former US Fifth Fleet Commander Donegan cited detailed data confirming the military superiority of the US and Israel. However, military advantage cannot translate into an end to the war. Chatham House Middle East Program Director Vakil believes Iran views this conflict as a "war for survival." Iran learned lessons from the "Twelve-Day War" in June 2025 – premature concessions then exposed weakness. Therefore, Iran's current strategy is to wage a protracted war using asymmetric weapons like low-cost drones, spreading the cost as widely as possible until it obtains security guarantees ensuring the long-term survival of the Islamic Republic (including substantial sanctions relief). Vakil emphasized, "Until Iran sees a credible path to these guarantees, it has no motivation to end this war." Furthermore, Iran's command structure is far more resilient than the market assumes. Vakil pointed out that the Islamic Revolutionary Guard Corps (IRGC) manages daily defense through a decentralized "mosaic command structure," and this bureaucratic system remains operational. Former US Middle East envoy Ambassador Dennis Ross revealed another deadlock from Washington's perspective: if not for Iran's control over the Strait of Hormuz, Trump might have already declared victory. Trump has every reason today to claim Iran cannot pose a conventional threat to its neighbors for at least five years, but "as long as Iran controls who exports oil and who sails through the strait, he cannot declare victory and stop." Ross believes that, with US forces unable to seize territory along the strait, mediation facilitated by Russian President Putin might be the fastest way to break the impasse. However, conditions for mediation are currently not ripe, especially after the recent killing of former parliament speaker Ali Larijani, a key figure capable of coordinating various factions (including the IRGC). This leadership vacuum significantly reduces the probability of a peace agreement in the short term.

Can military escorts break the physical supply disruption? Donegan's answer is stark: capable of escorting, but incapable of restoring normal flow volumes. Although the US and its allies (UK, France, Germany, Italy, Japan, etc.) have stated readiness to participate in escorts and have conducted related military exercises over the past 15 years, Donegan emphasized that escort models inherently lack economies of scale. He assesses that military escorts could at most restore 20% of normal oil flow, with an additional 15-20% from land pipelines, still leaving a massive gap from normal levels. Restoring supply isn't like flipping a switch; the ultimate主动权 lies with Iran – "This is not purely a military issue, but a game about motivations and leverage."

Unprecedented energy supply disruption – Oil prices could surpass 2008 highs. Data from Goldman Sachs' commodities team quantifies the historic scale of this shock: estimated current disruptions to Persian Gulf oil flows are as high as 17.6 million barrels per day (bpd), representing 17% of global supply, 18 times the peak disruption of Russian oil in April 2022. Actual flow through the Strait of Hormuz has plummeted 97% from the normal 20 million bpd to just 0.6 million bpd. Although some crude is being rerouted via Saudi Arabia's East-West Pipeline (to Yanbu port) and the UAE's Habshan-Fujairah pipeline, Goldman Sachs estimates the net rerouting capacity of these two pipelines is capped at only 1.8 million bpd, a drop in the bucket. Based on this, Goldman Sachs constructed three medium-term oil price scenarios: Scenario 1 (Most optimistic: Pre-war flows restored within one month): Forecasts Q4 2026 Brent crude average at $71/barrel. Global commercial inventories would suffer a 6% (617 million barrel) drawdown. IEA member releases of Strategic Petroleum Reserves (SPR) and absorption of Russian floating storage could offset about 50% of the shortfall. Scenario 2 (Disruption lasts 60 days until April 28): Forecasts Q4 2026 Brent average soaring to $93/barrel. Inventory drawdown would widen to nearly 20% (1.816 billion barrels), with policy responses offsetting only about 30%. Scenario 3 (Extreme: 60-day disruption plus long-term Middle East capacity damage): If Middle East production remains 2 million bpd below normal levels after reopening, Q4 2027 Brent could reach $110/barrel. Goldman Sachs warns that if persistently low flows keep the market focused on long-term disruption risks, Brent crude is highly likely to break through its 2008 all-time high. Historical data shows that four years after the five largest supply shocks in history, production in affected countries remained on average more than 40% below normal levels. Given that about 25% of Persian Gulf production comes from offshore operations, the engineering complexity implies a very lengthy recovery cycle for capacity.

The crisis in the natural gas (LNG) market is equally serious. The European gas benchmark (TTF) price has surged over 90% since pre-conflict levels to €61/MWh. More critically, according to QatarEnergy CEO Saad Al-Kaabi, damage from an Iranian missile strike to the 77 mtpa Ras Laffan LNG plant will lead to 17% of the country's LNG capacity being shut down for the next 2-3 years. Goldman Sachs notes that if Qatari LNG shutdowns exceed two months, TTF prices could approach €100/MWh. Goldman's previously anticipated "largest-ever LNG supply growth wave in 2027" now risks significant delay. In response to the crisis, the US government has deployed multiple policy tools: coordinating the release of 172 million barrels of SPR (averaging ~1.4 million bpd), exempting sanctions on Russian and Venezuelan oil, and suspending the Jones Act for 60 days. However, Goldman Sachs US chief political economist Alec Phillips points out that US SPR inventory is already below 60% of capacity and, under current plans, will plummet to 33% by mid-year, limiting further release potential. Regarding a potential crude oil export ban, while "very possible," it is not currently part of the baseline assumption.

Markets are pricing "inflation," not yet "recession." The erosion of the global macroeconomy by the energy shock is becoming apparent. Goldman Sachs senior global economist Joseph Briggs proposed a key "rule of thumb": A 10% increase in oil prices reduces global GDP by over 0.1%, increases global headline inflation by 0.2 percentage points (with greater impact in some Asian countries and Europe), and raises core inflation by 0.03-0.06 percentage points. By this calculation, the current three-week disruption has already dragged global GDP by approximately 0.3%; a 60-day disruption would lead to a 0.9% global GDP decline and push global prices up by 1.7%. Combined with the 51 basis point tightening of the Global Financial Conditions Index (FCI) since the conflict began, the risk of an economic slowdown is rising sharply. Yet, Goldman Sachs chief FX and emerging market strategist Kamakshya Trivedi pinpointed the most critical vulnerability in current global market pricing: markets have not priced in any "growth slowdown" risk. Trivedi analyzes that global assets have so far traded this conflict solely as an "inflation shock." This is evident in: hawkish repricing in rates markets (sharp rises in front-end yields in G10 and EM, most pronounced in the UK and Hungary which had priced the most rate cuts); and FX market divergence strictly along Terms of Trade (ToT) lines (USD strength, outperformance by energy exporter currencies like Norway, Canada, Brazil, and pressure on Eurozone and Asian importer currencies). This pricing logic implies a dangerously optimistic premise – the market firmly believes the war will be short-lived (confirmed by the downward-sloping term structure of oil and gas futures). Trivedi warns that if this complacency is proven wrong and energy prices prove persistent, markets will be forced to violently reprice global growth and corporate earnings downward. Then, the "growth slowdown" will become the second shoe to drop. Under this recession trading logic: Developed market and EM equities, which have held relatively firm so far, would face significant selling pressure; Pro-cyclical assets like copper and the Australian dollar would be sold off aggressively; The hawkish pricing in front-end yields would reverse; The Japanese Yen (JPY) would replace the USD as the ultimate safe-haven currency in a scenario of falling stocks and bonds.

The Middle East and North Africa (MENA) region is already feeling the economic chill. Goldman Sachs MENA economist Farouk Soussa estimates that Gulf Cooperation Council (GCC) countries are losing approximately $700 million per day in oil revenue alone. A two-month disruption would bring total losses close to $80 billion. The decline in non-oil GDP for countries like Oman, Saudi Arabia, and Kuwait could even exceed levels seen during the COVID-19 pandemic in 2020. Amid capital flight and safe-haven sentiment, the Egyptian Pound (EGP) has become the worst-performing frontier market currency since the conflict began.

Conclusion. The core variable of this historic crisis is no longer the firepower of US forces, but the timeline for reopening the Strait of Hormuz. Although Trump and senior cabinet officials (like Energy Secretary Wright) have recently signaled optimism that the war will end within "weeks," Goldman Sachs believes that Iran's survival logic, the US political constraint of strait control, the inherent limitations of escort capacity, and the absence of mediation conditions all point to one possibility: the disruption will last longer than the "few weeks" currently implied by market pricing. Once this expectation is corrected, investors will face not just a continuation of "inflation trading," but a switch to "recession trading." In Trivedi's words, the growth slowdown could be the next shoe to drop.