"Goldman Sachs had anticipated that flows of crude through the strait would fall to 15% of normal levels but Iran's effective blockade on tankers passing through the narrow waterway mean that only 10% of oil cargoes that usually transit the trade route have been able to pass."
"The bank, an influential oil commentator, warned that its analysis of trade flows last week suggested the impact was 17 times larger than the peak April 2022 hit to Russia production after the Kremlin's invasion of Ukraine, which pushed the oil price to $110 a barrel."
"We now also think it's likely that oil prices, especially for refined products, would exceed the 2008 and 2022 peaks, if strait of Hormuz flows were to remain depressed throughout March."
Goldman Sachs warns that global oil prices face unprecedented pressure due to severe disruptions in crude flows through the Strait of Hormuz following recent US-Israeli military action against Iran. Oil exports through this critical trade route have fallen to only 10% of normal levels, exceeding Goldman Sachs' initial expectations of 15% disruption. The bank characterizes this shock as 17 times larger than Russia's production impact after the 2022 Ukraine invasion. Without resolution, oil prices are expected to exceed $100 per barrel within days and potentially reach $150 by month-end. If disruptions persist through March, refined product prices could surpass 2008 and 2022 peaks, with serious global economic consequences. Oil prices have already climbed above $90 per barrel, marking the highest weekly gains since the Covid-19 pandemic.
#oil-price-surge #strait-of-hormuz-disruption #iran-us-tensions #global-energy-crisis #commodity-markets
Read at www.theguardian.com
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