$120 Oil Price Looms as Middle East Tensions Escalate

The Strait of Hormuz, a crucial waterway for oil exports, has been at the center of escalating tensions between the US and Iran. The recent attacks on Iranian tankers by Washington and Tehran's declaration of a new restricted zone have heightened concerns about shipping disruptions.

Goldman Sachs Group Inc. warns that if these disruptions intensify, crude prices could surge to as high as $120 a barrel. In an interview with Bloomberg TV, Daan Struyven, co-head of global commodities research at Goldman Sachs, stated that 'events over the last few days do suggest that the risk of shipping disruptions broadening and intensifying is an important one.'

The current price of Brent crude is near $97 a barrel. Goldman Sachs' upside scenario suggests a significant increase in prices if exports from the region are severely impacted. On the other hand, if exports normalize, the bank predicts a lower target of $80 a barrel.