On a potential Strait of Hormuz closure… Goldman Sachs warns oil prices could "break above $100"

Goldman Sachs, a global investment bank, said the latest Iran-driven turmoil in the Middle East could push international crude prices above $100 a barrel.

According to Walter Bloomberg on the 4th (local time), Goldman Sachs forecast that if the Strait of Hormuz closure is prolonged, international crude prices could surge to around $100 a barrel. Earlier, Iran closed the Strait of Hormuz after U.S. airstrikes. The strait is a strategic chokepoint through which about 20% of the world’s seaborne crude shipments pass, and is often dubbed the “global energy artery.”

Goldman Sachs said its base case does not call for a sharp spike in international crude prices. The bank’s analysis suggests that if crude flows through the Strait of Hormuz gradually recover over about one month, Brent will average about $76 a barrel in the second quarter of this year.

The risk is if damage to Middle Eastern oil infrastructure widens or the Strait of Hormuz closure drags on. Goldman Sachs said that if Middle Eastern crude exports remain at the current level for about five weeks, Brent could rise above $100 a barrel. Brent last topped $100 a barrel in 2022, when the Russia-Ukraine war erupted.