Goldman Sachs: Escalation between the US and Iran could slow the recovery of oil supplies in the Gulf
Goldman Sachs reported that the latest attacks in the Strait of Hormuz could slow the pace of oil production increases in the Middle East, while the revocation of U.S. sanctions exemptions may renew pressure on Iranian o
Translated by Qiyas from الجريدة — Original source
Goldman Sachs reported that the latest attacks in the Strait of Hormuz could slow the pace of oil production increases in the Middle East, while the revocation of U.S. sanctions exemptions may renew pressure on Iranian oil exports, which had only recently begun to recover.
Oil prices continued their gains on Thursday, as the latest wave of attacks exchanged between the United States and Iran dashed hopes for the full reopening of the Strait of Hormuz.
Brent crude futures rose 1 percent to $78.88 per barrel, and U.S. West Texas Intermediate crude increased by roughly the same percentage to $74.34. Both benchmarks closed on Wednesday with gains of approximately 5 percent, after touching their highest levels in over two weeks earlier in the session.
The bank noted that it still expects oil flows through the Gulf to return to normal levels by the end of July, provided that 60-day negotiations continue, the special exemption for Iranian oil is reinstated, and shipping companies receive adequate security guarantees. This scenario requires an increase in flows through the Strait of Hormuz of about 6.6 million barrels per day.
The bank stated, “Although this does not represent the base case in our forecasts, the failure of negotiations and the escalation of attacks on oil tankers, along with the possibility of the United States imposing a blockade on Iranian oil, could lead to further declines in oil flows from the Persian Gulf.”
It added that oil exports from the Gulf currently stand at 71 percent of normal levels following recent attacks on oil tankers, down from 83 percent of pre-war levels recorded during the first ten days after the Strait of Hormuz was reopened in June.
Meanwhile, the bank also pointed out that escalating attacks on Russian refineries, combined with declining product inventories and slowing operating rates in the Middle East and Asia, reinforce its expectation that refined product profit margins will remain elevated for a longer period.
