Oil could rally to $120 a barrel if attacks on Middle East shipping intensify, according to Goldman Sachs commodities research co-head Daan Struyven.
“Events over the last few days do suggest that the risk of shipping disruptions broadening and intensifying is an important one,” Struyven said. Goldman Sachs also sees oil falling to about $80 a barrel if regional exports normalise. The bank favours natural gas and diesel as hedges against supply disruption because the potential supply shocks are larger than in crude.
Rystad Energy also sees Brent reaching $120 a barrel in a worst-case scenario if the current disruption persists for several months and there is no diplomatic agreement between the US and Iran.
Jorge León, senior vice president and head of geopolitical analysis at Rystad Energy, said oil-price movements are being heavily influenced by expectations for tanker traffic through the Strait of Hormuz.
The Joint Maritime Information Center maintained a SEVERE threat level for the Strait of Hormuz on September 6, with commercial traffic still well below normal levels.
A UK Maritime Trade Operations assessment for the week ending September 4 put AIS-detected traffic through Hormuz at about 90% below the pre-conflict baseline.
JMIC said US forces struck the Iranian-linked tankers STARK 1, DOWNY and KYLO, also known as NOXEN, on September 5. KYLO later sank.
Brent crude settled at $97.31 a barrel on September 7, its highest close since July 24, while US West Texas Intermediate settled at $92.65. Rystad Energy’s September 4 market update put global LNG supply 9% below the year-earlier level and maintained a base case for an uneven reopening of the Strait of Hormuz by the fourth quarter.
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Rystad Energy is an independent energy research and business intelligence company providing data, analysis and advisory services across energy markets.