Goldman Sachs Issues Stark Oil Warning as Global Shipping Disruptions Loom
Goldman Sachs is warning of a wide oil-price range due to escalating attacks on Middle East shipping, which could threaten global energy supplies.
The bank says that if shipping disruptions broaden and intensify, oil prices could surge to $120 a barrel. This represents a 23% upside from Brent's current price of $97.50.
However, Goldman also sees oil falling to $80 if regional exports normalize, which would be an 18% decline from the current price.
Daan Struyven, co-head of global commodities research at Goldman Sachs, said that recent events suggest a risk of shipping disruptions broadening and intensifying is an important one. He noted that even without complete closure of the Strait of Hormuz, attacks can raise insurance costs, delay deliveries, and force traders to demand premiums for immediate barrels.
Goldman recommends natural gas and diesel trades as a way to capture gains rather than relying solely on crude oil. This suggests that disruption could affect energy markets unevenly, with refined products or gas potentially offering exposure.