Oil Prices May Soar to $120 as Middle East Tensions Escalate

Goldman Sachs has issued a warning about oil prices surging to $120 per barrel if attacks on shipping in the Middle East continue. Daan Struyven, co-head of global commodities research at Goldman Sachs, stated that recent developments indicate the risk of widening and worsening shipping disruptions is becoming an important concern.

The situation escalated over the weekend after the US struck three Iranian oil tankers, following attacks by Iran's Islamic Revolutionary Guard Corps on two US warships with ballistic missiles. Iranian parliament speaker Mohammad Bagher Qalibaf warned that future retaliation would be 'faster, heavier and more painful.'

Goldman Sachs sees 'meaningful upside to crude oil prices', Struyven said, while also suggesting investors bet on higher natural gas and refined product prices. JPMorgan estimates every additional month of disruption could add $7-$8 per barrel to Brent prices.