Goldman Sachs Sees Oil Prices Soar to $120 Per Barrel Amid Strait of Hormuz Tensions
Goldman Sachs warned that oil prices could surge to $120 per barrel if attacks on Middle East shipping continue. The prediction is based on recent events, which suggest a broadening and intensifying risk of shipping disruptions.
The Strait of Hormuz, through which one-fifth of the world's oil passes during peacetime, has seen a significant decline in traffic. According to data from analytics firm Kpler, an average of 10 commodity ships transited the strait each day over the past 10 days, down from more than 15 on Friday and nearly 13 on Saturday.
The risk of shipping disruptions is further compounded by the fact that Iran has announced new sanctions for ships trying to pass through the strait. Tehran will unveil a new 'exclusion zone' outside of the waterway in the coming days, with any ship seen entering the restricted zone being added to a sanctions list.
Golman Sachs sees 'meaningful upside to crude oil prices', but notes that supply shocks are bigger than in the crude market when it comes to gas and fuels. The current price of Brent crude is above $97 per barrel, with Goldman predicting that it could surpass $100 per barrel for the first time since 23 July.