Home · World · Sep 7 archive
Goldman Sachs warns oil could surge to $120 a barrel if attacks on Hormuz continue
Developing
In Short: Iran has announced plans to establish a new restricted zone around the Strait of Hormuz, a key energy chokepoint, amid ongoing tensions with the US.
According to reports, Iran plans to establish a new restricted zone around the Strait of Hormuz, a move that experts see as a dangerous escalation. The zone, which would extend from the line of the US naval blockade to the Strait of Hormuz and into the Persian Gulf, is part of Iran's response to ongoing attacks on ships in the crucial waterway. Rezaei, the new head of Iran’s Supreme National Security Council, said that any ship entering the new zone would be placed on a sanctions list.
Rezaei also stated that new maps detailing routes, worked on in conjunction with Oman, would be approved soon. The announcement comes after Deputy Foreign Minister Kazem Gharibabadi said that Iran and Oman had agreed on a temporary maritime route for ships travelling through the Strait of Hormuz, whose entry would be through Iranian territorial waters. The MoU, which had ended the months-long military hostility, collapsed after 60 days due to disputes over control of the Strait.
US Energy Secretary Chris Wright said that current transits were averaging more than nine million barrels of oil per day. Goldman Sachs, in a warning to investors, said that oil prices could surge to as much as $120 per barrel if attacks on shipping in the Middle East intensify. Daan Struyven, co-head of global commodities research at Goldman Sachs, told TV that events over the last few days suggest the risk of shipping disruptions broadening and intensifying is a significant concern.
Oil prices have rallied in recent days amid the re-escalation of hostilities and jumped early on Monday in Asian trading to the highest level since mid-July, nearing the $100 per barrel threshold. Brent Crude traded at over $97 per barrel, while the US benchmark West Texas Intermediate was trading at around $93 per barrel. Reiterating the warning, Mohsen Rezaei said that any ship seen entering the new restricted zone would be added to a sanctions list, and the waterway would only fully open again once the Americans 'stop the sabotage, threats and attacks on Iran.
What's confirmed
What's still developing
- The two sides have been engaged in on-and-off attacks since a 60-day memorandum of understanding (MoU), signed on June 17, expired last month.
- Oil tankers have become the latest targets in the US-Israel war on Iran, with Tehran repeatedly warning vessels against using unauthorised routes through the Strait of Hormuz amid reports that a growing number of oil tankers are passing through the waterway.
- Goldman sees “meaningful upside to crude oil prices,” Struyven told Bloomberg, but added that investors should bet on rising natural gas and refined product prices.
- Goldman Sachs sees “meaningful upside to crude oil prices”, but said that in gas and fuels, the “supply shocks are bigger than in the crude market”.
Sources
- Ventureburnlink