Goldman Sachs warns gasoline prices could surge again worldwide

11:15

By: Azzat Manal

Goldman Sachs warns gasoline prices could surge again worldwide

Global fuel markets could face renewed pressure as disruptions affecting diesel supplies begin to spill over into gasoline markets, with geopolitical tensions and reduced shipping activity through the Strait of Hormuz adding to concerns over energy availability.

Goldman Sachs expects gasoline prices to remain under upward pressure in the coming period as refineries adjust their production strategies to meet stronger demand for diesel. The shift could reduce the amount of gasoline available on international markets and contribute to higher prices.

Analysts at the U.S. investment bank said in a note cited by Bloomberg that tight diesel supplies are encouraging refiners to prioritize diesel production. While this can help address shortages in the diesel market, it may simultaneously constrain gasoline output and push prices higher.

The outlook comes as diesel prices in the United States have reached record levels. According to data from the American Automobile Association, the national price of diesel stood at around $6.39 per gallon on Thursday.

Energy market pressures have been intensified by the conflict in the Middle East and declining maritime traffic through the Strait of Hormuz, a key route for global energy shipments. Any prolonged disruption could increase uncertainty over fuel supplies and place additional pressure on international markets.

Rising gasoline and diesel prices could also have broader economic consequences. Higher fuel costs tend to feed into transportation and shipping expenses, potentially increasing the prices of goods and services and adding to inflationary pressures.

Persistent energy price increases could further complicate decisions by central banks, particularly the U.S. Federal Reserve. If higher fuel costs keep inflation elevated for longer, policymakers may face greater challenges in determining the appropriate direction of monetary policy.

The developments underline the close link between global fuel markets, refinery operations and geopolitical risks, with changes in the availability of one major fuel product potentially affecting prices across the broader energy market.