- Goldman Sachs estimates a geopolitical premium of approximately $10 per barrel on Brent crude, though it suggests oil could exceed $90 if Iranian supply is disrupted.
- The bank’s base-case scenario, which assumes no supply disruption and Brent averaging $60 per barrel, is becoming increasingly doubtful due to President Trump’s floating of the possibility of the United States joining Israel in bombing Iran.
- Barclays warns that crude prices could surge above $100 per barrel if the Middle East conflict escalates, and Brent could reach $85 per barrel if half of Iran’s oil exports are disrupted.
Geopolitics could move Brent crude higher by around $10 per barrel, Goldman Sachs has estimated, from a starting point in the mid-$70s. However, the bank admitted oil could top $90 in case of Iranian supply disruption. Goldman’s analysts pointed to the disruption of oil flows via the Bab el-Mandeb Strait by the Yemeni Houthis’ attacks on vessels as an example of the fragility of Middle Eastern oil export security. Its base-case scenario, the bank said, remains the same, with Brent averaging $60 per barrel in the final quarter of the year in case of no supply disruption. This scenario, however, has in recent days become increasingly doubtful as President Trump floats the possibility of the United States joining Israel in bombing Iran. “I may do it. I may not do it. I mean, nobody knows what I’m going to do,” Trump told media earlier this week, causing a reaction among Republican party supporters who’d rather the U.S. stayed away from that war. “We can’t do this again,” Steven Bannon said at an event in Washington this week. “We’ll tear the country apart. We can’t have another Iraq.” Trump has acknowledged the opposition, saying “I’m not looking to fight. But if it’s a choice between them fighting or having a nuclear weapon, you have to do what you have to do.” Barclays has warned that crude could surge above $100 per barrel if the war in the Middle East heats up. The bank also said that Brent could hit $85 per barrel if half of Iran’s oil exports gets disrupted. Iran exports over 2 million barrels of crude daily, almost exclusively to China.
NN: as you know we have been predicting this war for over a year now and $100 Brent Oil
Shell CEO Warns of ‘Huge Impact’ If Strait of Hormuz Blocked
Shell Plc, one of the biggest traders of oil and natural gas, has contingency plans in case the conflict between Israel and Iran disrupts flows from the region, warning that a potential blockage of the Strait of Hormuz could deliver a substantial shock. “If that artery is blocked, for whatever reason, it has a huge impact on global trade,” Chief Executive Officer Wael Sawan said at the Japan Energy Summit & Exhibition in Tokyo. “We have plans in the eventuality that things deteriorate.” The global energy market has been transfixed by the conflict between Israel and Iran, including the possibility the US may decide to join the assault. So far, while crude has spiked due to the hostilities, there’s been no major interruption to flows of energy, although traders are on high alert. About a quarter of the world’s oil trade passes through the Strait of Hormuz, which links the Persian Gulf to the Indian Ocean. In the past, Iran has targeted ships traversing the chokepoint, and has threatened to block the waterway. In recent days, ships’ signals have been jammed.Senior US officials are preparing for the possibility of a strike on Iran in the coming days, according to people familiar with the matter, a sign that Washington is assembling the infrastructure to directly enter the conflict with Tehran. The situation is still evolving and could change, they said. “The risks of serious energy supply disruptions will rise if the Iranian leadership believes that they are facing an existential survival threat,” RBC Capital Markets LLC analysts including Helima Croft said in a note. “Direct US entry into this conflict could be a catalyst for more direct disruptive actions against tankers and critical infrastructure in the region.”