Oil prices to hit $120 soon? Goldman Sachs makes big prediction as Hormuz concerns loom
Wall Street major Goldman Sachs has warned that Brent crude could surge to $120 per barrel if disruptions through the Strait of Hormuz, the world's
Wall Street major Goldman Sachs has warned that Brent crude could surge to $120 per barrel if disruptions through the Strait of Hormuz, the world's most critical oil transit route, persist, even as its base case assumes an eventual easing of tensions in the Middle East.Goldman Sachs expects Brent crude to average $80 per barrel in the fourth quarter and $75 next year, assuming tensions in the Middle East ease. However, the risks to its forecasts remain "tilted to the upside" due to potential disruptions to shipping through the Strait of Hormuz and possibly the Red Sea, analysts said. Global energy markets have faced renewed volatility this month, with Brent climbing back above $91 per barrel amid fresh fighting between the U.S. and Iran and a threat by Iran-backed Houthi rebels in Yemen to blockade shipments from Saudi Arabia.
Red Sea routes have played a key role in enabling Persian Gulf crude cargoes affected by disruptions to reach buyers.Also read: Relieved that crude has finally fallen? The real warning signs just began flashing elsewhereGoldman Sachs said lower global inventories in the second quarter have increased the oil market's vulnerability to supply shocks. However, weaker Chinese imports and greater demand elasticity could limit the potential for further price gains.Crude oil price todayOil prices edged lower on Tuesday as markets weighed reports of renewed diplomatic efforts between the U.S. and Iran, including a proposed 10-day ceasefire, against continued military exchanges and a threat by Yemen's Houthis to impose a naval blockade on Saudi Arabia.A senior Iranian official told Reuters that Tehran had received a 10-day ceasefire proposal from mediators. The initiative aims to preserve the interim agreement signed on June 17 and create a path toward a lasting deal to end the conflict that began on February 28 following U.S.-Israeli attacks on Iran.The diplomatic push followed another night of U.S. strikes on Iranian cities and retaliatory attacks by Iran's Revolutionary Guards on U.S. military assets across the region.
U.S. Central Command later said on Monday that it had launched another round of strikes on Iran.The U.S. carried out its 10th consecutive day of strikes after President Donald Trump vowed that Iran "will pay" for the killing of American soldiers. Iran responded with attacks on Kuwait.The conflict began on February 28, when the U.S. and Israel launched attacks on Iran. Tehran retaliated with strikes on Israel and Gulf states that host U.S. military bases. U.S.-Israeli attacks on Iran, along with Israeli strikes on Lebanon during the conflict, have killed thousands of people and displaced millions.Also read:Oil is crude once again! Is $95 the new normal and what it means for Indian investors?Over the past week, Trump has also threatened to widen the scope of U.S. strikes in Iran to include energy facilities and bridges.The 1949 Geneva Conventions, which set rules for humanitarian conduct during war, prohibit attacks on sites considered essential to civilian life.
The BriefWire