Goldman Sachs Warns Oil Could Surge to $120 a Barrel if Attacks on Hormuz Continue

6:10 PM ETDeveloping

World Desk

In Short: Oil prices could rise to $120 per barrel if attacks on shipping in the Middle East intensify, according to Goldman Sachs, as tensions escalate around the Strait of Hormuz.

Iran has announced plans to establish a new restricted zone around the Strait of Hormuz, a key global energy chokepoint, amid ongoing tensions with the US and escalating attacks on oil tankers in the region.

Goldman Sachs warns that oil prices could surge to $120 per barrel if attacks on shipping in the Middle East intensify, with Brent crude oil prices on track to surpass $100 per barrel for the first time since July.

The US Energy Secretary, Chris Wright, reported that current transits through the Strait of Hormuz are averaging more than nine million barrels of oil per day, highlighting the potential impact of any disruption.

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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.
Rezaei said the zone would “begin from the line of the US naval blockade, extend toward the Strait of Hormuz, and from this side continue into the Persian Gulf”.
Rezaei said new maps detailing routes, worked on in conjunction with Oman for the Hormuz Strait, would also be approved soon.
The announcement comes after Deputy Foreign Minister Kazem Gharibabadi said late last month that Iran and Oman had agreed on a temporary maritime route for ships travelling through the Strait of Hormuz, whose entry “would be through our territorial waters, and part of the exit route would also be through our territorial waters”.
The MoU, which had ended the months-long military hostility, collapsed after 60 days due to disputes over who had ultimate control over the Strait of Hormuz, which Iran has used as leverage in the war against the United States.
Saudi Aramco's Jizan Refinery Hit Again as Houthi Attacks Escalate What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… 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.

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