If disruptions in oil transport through the Strait of Hormuz continue, Brent crude prices could surpass $120 per barrel in the fourth quarter of this year, according to Goldman Sachs.
In a report released on July 20, Bloomberg reported that Goldman Sachs noted a decline in Persian Gulf oil transport volumes to below 45% of pre-war levels, contributing to rising oil prices. The firm warned that if transport disruptions in the Strait of Hormuz persist, Brent crude could exceed $120 per barrel in the fourth quarter.
However, this scenario is not Goldman Sachs' base case. The firm anticipates that, assuming tensions in the Middle East ease, Brent crude prices will average $80 per barrel in the fourth quarter and $75 next year. Still, they acknowledged that the likelihood of actual prices exceeding these forecasts is higher due to potential disruptions in the Strait of Hormuz and the Red Sea.
This month, tensions between the U.S. and Iran have escalated, with Iranian-backed Houthi rebels threatening to block Saudi oil shipments. As a result, Brent crude prices have risen above $90 per barrel, and they exceeded $126 per barrel in late April, during the early stages of the U.S.-Iran conflict.
Goldman Sachs also analyzed that global oil inventories decreased in the second quarter, making the market more vulnerable to supply shocks. However, they noted that a decline in Chinese oil imports and a slowdown in demand due to rising prices could limit the extent of price increases.
Additionally, Goldman Sachs expects continued supply instability in the diesel market. Supply has been tight since before the war, and Ukraine continues to attack Russian refineries. Hurricanes, summer heat waves, and delays in refinery maintenance are also cited as additional supply risks.
* This article has been translated by AI.
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