Goldman Sachs warns oil could reach $120 if Middle East shipping attacks escalate
Goldman Sachs has warned that crude oil prices could surge to as much as $120 a barrel if attacks on commercial vessels in the Middle East intensify, highlighting the growing risks facing global energy markets amid mounting geopolitical tensions.
Dan Struyven, co-head of Global Commodities Research at Goldman Sachs, said recent developments indicated that the possibility of wider and more severe disruptions to maritime shipping had become a key risk for investors and energy markets to monitor.
The bank's outlook remains highly dependent on the evolution of regional exports. If Middle Eastern oil shipments return to normal levels, Goldman Sachs expects crude prices to ease toward approximately $80 a barrel. Brent crude was trading near $97 a barrel, according to Bloomberg data cited in the report.
The investment bank also expects disruptions to natural gas and refined petroleum products, particularly diesel, to potentially have a greater impact than disruptions in the crude oil market itself. These markets could therefore become more important tools for investors seeking protection against geopolitical shocks.
Oil prices have been under sustained upward pressure as markets assess the possibility of prolonged disruptions to energy supplies from the Middle East. The Strait of Hormuz is particularly important because it is one of the world's main energy shipping routes, carrying a significant share of global oil and liquefied natural gas supplies.
Any prolonged interruption to maritime traffic through the region could therefore have consequences well beyond the countries directly involved, affecting fuel costs, transportation, inflation and economic activity worldwide.
The latest warning from Goldman Sachs underscores the sensitivity of energy prices to geopolitical developments. While the $120 scenario represents a potential outcome if disruptions worsen, a return to more stable exports could place downward pressure on crude prices and reduce fears of a prolonged supply shock.
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