Global oil prices could surpass $100 a barrel within days and reach $150 by the end of the month if the severe disruption to crude flows through the Strait of Hormuz continues, Goldman Sachs has warned. The US investment bank said 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 has allowed only 10% of usual oil cargoes to pass. The bank described the impact as 17 times larger than the peak disruption to Russian production after the invasion of Ukraine in April 2022, which pushed oil prices to $110 a barrel.
In a note on Friday, Goldman Sachs said: 'Based on these new data, developments and the size of the shock, we now think that oil prices would likely exceed $100 next week if no signs of solutions emerge by then.' It added that prices, particularly for refined products, could exceed the 2008 and 2022 peaks if flows remain depressed throughout March.
The oil price pushed above $90 a barrel late last week, with US crude rising $10 on Friday alone. Weekend trading on IG's markets saw US crude at more than $94 a barrel, indicating further rises when financial markets reopen. Overall, oil prices have surged more than 50% this year, from about $60 a barrel in January.
Clayton Seigle, a senior fellow at the Center for Strategic and International Studies, said: 'The grace period given by the market to the Trump administration expired at the end of last week. A deficit of 20m barrels per day is hitting global balances with no sign of relief.' He added that exports would not resume until shipowners and insurers feel safe from Iranian threats.
Qatar's energy minister warned that if the war continues, all Gulf energy exporters could be forced to shut down production within weeks, pushing oil to $150 a barrel. Oil storage facilities in Saudi Arabia, the UAE and Kuwait are reaching capacity, meaning major oilfields may need to close if crude cannot be exported via the Strait of Hormuz.
