Goldman Sachs Warns of $120 Oil Price Surge Amid Escalating Middle East Tensions

Oil prices could surge to $120 per barrel if attacks on Middle East shipping escalate, according to Goldman Sachs. The firm's co-head of global commodities research, Daan Struyven, warned that recent developments indicate a meaningful risk of shipping disruptions expanding and intensifying.

The conflict between the US and Iran has already lifted energy prices, with natural gas and petroleum products outperforming crude. Brent oil was trading near $92 at the time of writing, while industrial fuel diesel has more than doubled in price this year.

Struyven recommended that investors hedge against geopolitical risks by going long on global natural gas and refined-oil products, as supply disruptions are larger in those markets than in crude. However, Goldman Sachs also sees oil falling to $80 per barrel if regional exports return to normal.