US Strikes Iranian Launchers, Sending Oil Prices Soaring
US forces launched an attack on Iranian rocket launchers in the Strait of Hormuz, prompting Tehran to retaliate by targeting two US air bases in Jordan. This escalation has pushed oil prices up, with Brent crude futures gaining $2.11 or 2.40% to $90.20 a barrel.
The conflict, which began six months ago, has seen efforts to bring it to an end stall. Mediators are working to restore traffic through the Strait of Hormuz, which carries a fifth of the world's oil flows.
Goldman Sachs estimates that total Gulf oil exports have recently recovered to 15 million to 16 million barrels per day, but remain 7-8 million bpd below pre-war levels. JPMorgan estimates that each additional month of disruption could add $7-$8 a barrel to Brent prices, with the bank expecting average monthly Brent prices to reach $114 a barrel if the disruption continues for three months.
Goldman Sachs warns that Brent could climb to $120 a barrel if shipping disruptions through the Strait of Hormuz persist. In contrast, the bank expects Brent to average $80 a barrel in the fourth quarter and $75 a barrel next year.