Goldman Sachs Sees $120 Oil as Shipping Disruptions Loom Large
Goldman Sachs has issued a warning that oil prices could surge to as high as $120 per barrel if attacks on shipping in the Middle East intensify. The prediction comes after recent events, including the re-escalation of hostilities and the US striking three Iranian oil tankers.
The situation escalated further this weekend with Iran's parliament speaker warning that future retaliations from Iran will be 'faster, heavier, and more painful.'
Iran also announced plans to establish a new 'exclusion zone' near the Strait of Hormuz, which will extend into the Persian Gulf. Any ship entering this area with the intention of passing through the strait will be placed on Iran's sanctions list.
Brent Crude traded at over $97 per barrel early Monday morning, while US benchmark WTI Crude was above $92 a barrel.
Daan Struyven, co-head of global commodities research at Goldman Sachs, said that investors should bet on rising natural gas and refined product prices, as the supply shocks are bigger in these markets.