Middle East Tensions Threaten Oil Price Spike

Goldman Sachs has warned that the risk of shipping disruptions in the Middle East could push oil prices to $120 per barrel. The firm's co-head of global commodities research, Daan Struyven, said on Bloomberg TV that events over the past few days suggest a broadening and intensifying of shipping disruptions.

The threat is linked to ongoing tensions between the US and Iran in the Strait of Hormuz, one of the world's most important oil shipping lanes. The risk of disruptions has grown as the US attacked Iranian tankers, Tehran declared a new restricted zone beyond the strait, and US naval forces have continued a blockade of Iran's ports.

Struyven said that while there is an upside case for crude prices to hit $120, he recommends investors hedge against geopolitical risks by going long in global natural gas and refined-oil products. He noted that supply shocks are bigger in the natural gas and refined oil markets than in crude.