Goldman Sachs has warned that global oil prices could breach $100 a barrel within days and reach $150 by the end of the month if disruption to crude flows through the Strait of Hormuz continues. The US investment bank said oil exports via the vital trade route have fallen further than expected after the US-Israeli attack on Iran over a week ago.
Goldman Sachs had anticipated flows would drop to 15% of normal levels, but Iran's effective blockade means only 10% of oil cargoes are passing through. The bank described the impact as 17 times larger than the peak disruption to Russian production in April 2022 after the invasion of Ukraine, which pushed oil to $110 a barrel.
Oil prices pushed above $90 a barrel late last week, with US crude rising $10 on Friday alone. Weekend trading on IG showed US crude at over $94 a barrel, indicating further rises when markets reopen. Overall, oil has surged more than 50% this year, from about $60 a barrel in January.
Qatar's energy minister predicted that if the war continues, all Gulf energy exporters would be forced to shut down production within weeks, driving oil to $150 a barrel. Oil storage in Saudi Arabia, the UAE, and Kuwait is nearing capacity, meaning major oilfields may need to close if crude cannot be exported via the strait.
Hundreds of tankers have halted after Iran's Revolutionary Guards threatened to 'set ablaze' any vessel using the route, which carries a fifth of the world's oil and liquefied natural gas. The White House has suggested countermeasures, but analysts say they are insufficient to offset the loss of 20 million barrels of oil a day.
