Goldman Warns Oil Could Hit $120 as Middle East War Drags On
Goldman Sachs analysts have warned that crude oil prices could reach $120 per barrel if Middle East conflicts continue to disrupt shipping through the Strait of Hormuz. The prediction marks a shift from previous forecasts of an oil glut, driven by escalating tensions involving Iran and Houthi rebels.
Why it matters
Significant spikes in oil prices could trigger global inflationary pressures and disrupt energy supply chains, impacting the cost of living worldwide.
Crude oil prices could surge to $120 per barrel towards the end of the year if the war in the Middle East extends and the Strait of Hormuz remains closed for longer, Goldman Sachs has warned in its latest prediction in response to geopolitical developments in the Middle East. "Escalation in the Middle East and the decline in estimated Persian Gulf flows to below 45% of pre-war levels have pushed oil prices back up," Goldman's commodity analysts said in a note, as quoted by Bloomberg. This is not the first bullish oil price prediction from the investment bank, even though just a few weeks ago Goldman's commodity analysts were warning of an oil glut due to weak demand and ample supply, assuming the worst of the war between Iran and the United States was over.
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