$120 Oil Possible as Middle East Tanker Attacks Escalate
Goldman Sachs has warned of a possible surge in crude oil prices to as high as $120 per barrel if tanker attacks in the Middle East escalate and disrupt shipments. Daan Struyven, co-head of global commodities research at Goldman Sachs, said recent attacks have increased the risk of shipping disruptions broadening and becoming more severe.
The Strait of Hormuz, a critical waterway that handles one-fifth of global oil supplies, has seen traffic decline significantly since May. The average number of commodity vessels crossing the strait over the past 10 days is only 10 per day, with just two vessels transiting on Saturday and six on Sunday.
Brent crude climbed $1.20 to $97.48 per barrel on Monday morning, while US West Texas Intermediate crude gained $1.14 to $92.62 per barrel. Goldman's warning comes as renewed hostilities between the United States and Iran push prices higher.