A major Wall Street investment firm is predicting that oil prices could climb beyond $100 per barrel within the next week if shipping disruptions through a critical Middle Eastern waterway persist.
Goldman Sachs issued the warning on March 6, stating that the risks to their original price predictions are mounting rapidly due to severe interruptions in the Strait of Hormuz shipping lanes.
The financial institution indicated it may need to adjust its oil price projections in the coming days unless there are clear signs that normal shipping operations will resume through the strait. Goldman Sachs currently projects Brent crude prices in the $80s range for March and upper $70s for the second quarter.
“We now also think it’s likely that oil prices, especially for refined products, would exceed the 2008 and 2022 peaks, if Strait of Hormuz flows were to remain depressed throughout March,” the bank stated.
Oil markets experienced their most significant weekly increases on Friday since the extreme market volatility witnessed during the early months of the COVID-19 pandemic in 2020. The gains came as Middle Eastern conflicts have brought shipping and energy exports through the crucial Strait of Hormuz to a standstill.
According to Goldman Sachs’ calculations, daily shipping volumes through the Strait of Hormuz have declined by approximately 90%.
Tensions escalated further when a representative of Iran’s Revolutionary Guards issued a challenge to U.S. President Donald Trump to send American naval forces to provide protection for oil tankers navigating the strait. Trump responded by demanding Iran’s “unconditional surrender,” marking a significant increase in his demands one week after initiating military action alongside Israel, potentially complicating efforts to reach a quick resolution to the conflict.
Additionally, Barclays issued its own warning earlier in the day, suggesting that Brent crude prices could potentially reach $120 per barrel if the Middle Eastern conflict continues for several more weeks.
