Wall Street Keeps Catching Up to a Crisis Already Ahead of Them

When Goldman Sachs raised its Brent forecast to $90 back in late April, it felt bold. It wasn't bold enough.

As of Monday, May 18, Brent crude futures were trading above $112 a barrel, according to ZeroHedge's report on Francisco Blanch's Bloomberg Television appearance. Goldman's $90 call — which we covered when it dropped — is now a price point in the rearview mirror.

Now Bank of America's head of commodities and derivatives research, Francisco Blanch, has formally joined that forecast. His statement on Bloomberg TV: "We have a pretty large deficit that is running 14 million to 15 million barrels a day short, or 14% to 15% short of what we need to see for prices to stabilize and go down to $60 or $70 a barrel."

The Numbers Are Getting Worse, Not Better

Blanch's base case assumes continued Strait of Hormuz disruption through at least next month. If the double blockade holds, he's warning of a "gradual grind higher" to $120–$130 a barrel by late June or early July, according to ZeroHedge.

For context on how we got here: CNBC's war timeline shows Brent jumped from roughly $72 a barrel on February 27 — the day before U.S.-Israeli strikes on Iran began — to nearly $120 at its peak. That's a 55% surge in under three months. March alone saw a 51% single-month price spike, one of the largest on record.

Frederic Lasserre, head of research at Gunvor — one of the world's largest oil traders — told reporters last week: "The tipping point is clearly June. This is the point at which something has to give."

JPMorgan analysts have gone further, warning of a catastrophic cliff-edge shortage if the Hormuz chokepoint stays blocked another four weeks, per ZeroHedge.

Diplomacy Is Dead — At Least for Now

Any remaining hope for a near-term ceasefire has collapsed.

According to CNBC, President Trump swiftly rejected Iran's response to a U.S. peace proposal and then publicly declared the ceasefire was on "life support." That statement landed on Monday, May 11, and oil markets responded accordingly.

Trump is currently on a two-day visit to China to meet President Xi Jinping, with Iran among the topics on the table alongside Taiwan, AI, and nuclear weapons, per CNBC. Whether Xi can move the needle is an open question — but markets aren't betting on it.

The Trump administration's posture, per CNBC, is that it is NOT open to concessions to Tehran. That's the operational reality shaping every barrel price right now.

Gold Caught in the Crossfire

The Iran situation is now rippling directly into interest rate expectations — and that's hitting gold in a counterintuitive way.

Spot gold is hovering around $4,717 per ounce, per CNBC's May 11 report. It fell more than 1% earlier that session before recovering slightly. Jim Wyckoff, senior market analyst at Kitco Metals, attributed the bounce to "bargain hunting" ahead of U.S. inflation data.

Higher oil prices mean higher inflation. Higher inflation means the Fed holds rates elevated. Higher rates increase the opportunity cost of holding gold. Daniel Pavilonis, senior market strategist at RJO Futures, told CNBC that markets are laser-focused on whether the Strait reopens — because that single variable is driving the inflation outlook.

Global brokerages have now scaled back expectations of two Fed rate cuts in 2026, with forecasts split between modest easing and NO cuts at all, according to CNBC. That's a dramatic shift from where rate expectations sat three months ago.

What Mainstream Coverage Is Missing

Most financial media is framing this as a "forecast story" — Goldman said $90, now BofA says $90. Clean, tidy, easy to write.

The real story: these forecasts are already obsolete the moment they're published. Brent is at $112. Blanch's own worst-case scenario — $120–$130 — could be the base case by July 4th if nothing changes at Hormuz.

The Wikipedia economic impact entry on the 2026 Iran war is blunt: the International Energy Agency has called this the "largest supply disruption in the history of the global oil market." That framing — the largest EVER — is barely making it into mainstream financial reporting. CNN and CNBC are running timeline pieces. Nobody is screaming that headline from the rooftop.

Serious coverage of what "availability issues" during the summer driving season actually means for American families is also scarce. Blanch used that phrase on Bloomberg TV. It means lines, rationing risk, and prices at the pump that make 2022 look quaint.

The Bottom Line

If you fill a gas tank, pay a utility bill, buy groceries, or run a business that ships anything — this is your story.

A 14–15% global oil supply deficit doesn't stay on trading floors. It shows up at Costco, at the pump, in your electric bill, and in every product that moves on a truck.

The June deadline Lasserre and JPMorgan are flagging is weeks away. Either something breaks diplomatically, or something breaks economically.