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Goldman flags risk of $120 oil as Middle East shipping tightens

Goldman said escalation in the Middle East, including reduced Persian Gulf flows and renewed disruptions around key shipping routes, could push crude to $120 per barrel toward year end.

Reported · Written up by our desk · Energy

Goldman Sachs is warning that crude oil prices could rise to $120 per barrel toward the end of the year if the Middle East conflict continues and the Strait of Hormuz stays closed for longer, according to OilPrice.

The bank cited escalation in the Middle East and a decline in estimated Persian Gulf flows to below 45% of pre war levels, which it said has pushed oil prices higher.

OilPrice noted Goldman had previously warned about an oil glut tied to weak demand and ample supply assuming the Iran United States conflict would not worsen.

Since that earlier view, Goldman said normalization of traffic through Hormuz has reversed, with the Houthis in Yemen threatening a naval blockade that could affect Saudi Arabia’s shipping, even as Saudi exports are routed through the Red Sea port of Yanbu and via an East West pipeline to bypass Hormuz.

Latest closeWTI crude $79.00 ▼0.8%

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