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4h ago

Brent Crude Exceeds $78 as Goldman Forecasts $110 Peak if Strait of Hormuz Closes

U.S. strikes on Iranian nuclear sites prompted Tehran to threaten cutting flows through the Strait of Hormuz, elevating the risk of a global oil supply shock

Miniatures of oil barrels and a rising stock graph are seen in this illustration taken January 15, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
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Overview

  • Goldman Sachs projects Brent crude could surge to $110 per barrel if oil flows through the Strait of Hormuz are cut by half for a month and remain at least 10% below normal over the following 11 months.
  • The bank assigned a 52% probability to Iran shutting the strait, citing crowd-sourced data from prediction platform Polymarket.
  • Goldman’s analysts expect prices to retreat to about $95 per barrel in the fourth quarter after an initial spike under its disruption scenario.
  • Brent crude opened the week trading above $78 per barrel, while West Texas Intermediate hovered around $75.24, reflecting an elevated geopolitical risk premium.
  • Market experts say future price movements will depend on whether supply disruptions materialize or if tensions between the United States, Iran and Israel de-escalate.