Hormuz Disruptions Fuel Oil Price Surge, but Goldman Sees Relief Ahead

Oil prices have risen sharply over the past week due to increased tensions in the Persian Gulf and disruptions to shipping through the Strait of Hormuz. According to Goldman Sachs, Brent crude is expected to trade at $85 a barrel by December 2026, despite current prices near $97.5 a barrel.

The market is closely watching the number of ships transiting the strait, with just seven vessels recorded on Monday, down from eight on Sunday. This is the lowest average over the past 10 days since May, according to Kpler data. Iran has threatened to target energy infrastructure across the Gulf if the US launches further attacks.

The supply strain is not limited to the Middle East, with commercial crude inventories in the US falling by 4.5 million barrels to 424.5 million in the week through August 28. Gasoline stocks dropped to 205.7 million barrels, around 6% below their five-year seasonal average.

Goldman Sachs' more cautious year-end view reflects the fact that substantial Gulf crude is still reaching the market and alternative export routes remain available. The bank's forecast also takes into account higher non-OPEC supply which could offset part of the disruption.