Goldman Sachs: Brent to exceed $120 amid continued Hormuz disruptions

Arabic - Goldman Sachs said that Brent crude prices could exceed $120 a barrel in the fourth quarter of this year and average $100 a barrel next year, if disruptions through the Strait of Hormuz persist and Gulf production does not fully recover until the end of 2027, according to Reuters.

Analysts in a note said that the latest escalation in the Middle East and the decline in estimated flows from Gulf countries to below 45% of pre-war levels carry risks that could raise Goldman Sachs’ forecasts of $80 a barrel for the fourth quarter and $75 for 2027, which assumed a de-escalation of tensions in the final quarter of this year.

Oil prices fell as markets balanced reports of mediation efforts between the United States and Iran. Brent crude futures dropped 0.3% to $88.83 a barrel, while the US West Texas Intermediate crude price for September delivery remained steady at $82.49 a barrel.

Meanwhile, data from the US Department of Energy showed that US crude oil inventories in the Strategic Petroleum Reserve fell by about 5.1 million barrels to 311.4 million barrels last week, their lowest level since March 1983.

The continued drawdown in inventories comes as the Strategic Petroleum Reserve is being tapped at a time when global oil markets are experiencing volatility, amid US administration efforts to bolster market supplies and ease pressure on fuel prices, amid ongoing geopolitical tensions and the repercussions of the war with Iran, which are affecting energy flows.