Goldman Sachs Warns Oil Could Hit $120 as Shipping Risks Rise
Oil prices could surge to as much as $120 per barrel if attacks on shipping in the Middle East intensify, according to Goldman Sachs. “Events over the last few days do suggest that the risk of shipping disruptions broadening and intensifying is an important one,” Daan Struyven, co-head of global commodities research at Goldman Sachs, told Bloomberg TV in an interview on Monday. Oil prices have…
According to Goldman Sachs, oil prices could potentially climb to $120 per barrel if conflicts in the Middle East escalate and disrupt shipping. "The risk of shipping disruptions broadening and intensifying is an important one," said Daan Struyven, co-head of global commodities research at Goldman Sachs to Bloomberg TV on Monday.
Oil prices have recently surged as tensions between the U.S. and Iran have re-escalated, reaching their highest level since mid-July nearing the $100 per barrel mark. This situation worsened this weekend after the U.S. reported striking three Iranian oil tankers in response to the IRGC targeting two U.S. warships with ballistic missiles.
In response, Iran's parliament speaker Mohammad Bagher Qalibaf stated that the era of "proportionate responses" is over, warning that future retaliations from Iran will be "faster, heavier, and more painful." Iran also announced it would establish a new "exclusion zone" extending from the U.S. naval blockade towards the Strait of Hormuz and into the Persian Gulf, with any ship entering this area being placed on a sanctions list.
Goldman Sachs sees "meaningful upside to crude oil prices," but expects investors to focus on rising natural gas and refined product prices, as supply shocks in these areas are greater than in the crude market.
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