Oil prices could climb as high as $120 a barrel if attacks on commercial shipping in the Middle East widen and intensify, Goldman Sachs has warned, as renewed US-Iran hostilities raise fresh concerns over crude, gas and refined-product supplies.
Daan Struyven, co-head of global commodities research at Goldman Sachs, told Bloomberg TV on Monday that recent developments had increased the risk of broader disruption to maritime traffic in the region.
“Events over the last few days do suggest that the risk of shipping disruptions broadening and intensifying is an important one,” Struyven said.
The warning came as Iran threatened to tighten restrictions on vessels approaching the Strait of Hormuz, following a weekend escalation in which the United States said it had struck three Iranian oil tankers.
Iranian authorities said Tehran would announce a new “exclusion zone” in the coming days, extending from the line of the US naval blockade towards the Strait of Hormuz and into the Persian Gulf.
Mohsen Rezaei, the new head of Iran’s Supreme National Security Council, said vessels entering the designated area with the intention of passing through Hormuz and identified by Iranian forces would be placed on Tehran’s sanctions list.
The threat followed a statement by Iranian parliament speaker Mohammad Bagher Qalibaf that Tehran had moved beyond what he described as an era of “proportionate responses”, warning that future Iranian retaliation would be “faster, heavier and more painful.”
The developments have placed the Strait of Hormuz at the centre of renewed market concerns. The waterway is one of the world's most important energy routes, and any sustained disruption to shipping could affect the movement of crude oil and petroleum products.
Oil markets have already responded to the latest escalation.
Brent crude rose to more than $97 a barrel in early Asian trading on Monday, reaching its highest level since mid-July and moving closer to the psychologically important $100 threshold.
The US benchmark West Texas Intermediate (WTI) was trading above $92 a barrel at the same time.
The latest price rally followed the US announcement that it had attacked three Iranian oil tankers after the Islamic Revolutionary Guard Corps allegedly targeted two American warships with ballistic missiles.
Goldman Sachs sees further potential for crude prices to rise, but Struyven said the greatest supply risks may extend beyond crude itself.
The investment bank expects natural gas and refined petroleum products to have significant upside, with Struyven arguing that supply disruptions are currently more severe in those markets than in crude.
“In gas and fuels, the supply shocks are bigger than in the crude market,” he said.
The distinction is significant for global energy markets because a disruption to shipping can affect not only crude exports but also the movement of finished fuels and other petroleum products.
The latest confrontation comes amid an increasingly entrenched six-month conflict between Washington and Tehran.
Iran has maintained pressure on maritime traffic through the Strait of Hormuz, while the United States has sought to impose a counter-blockade on Iranian ports and increase economic pressure through sanctions.
The collapse of a fragile ceasefire in July after attacks on commercial vessels in the strategic waterway had already heightened concerns over energy shipments.
The new threats and tanker strikes now raise the prospect of a broader disruption if commercial vessels become increasingly caught up in the confrontation.
For oil markets, the immediate concern is whether the escalation remains limited to selected military and Iranian-linked targets or develops into sustained interference with regional shipping.
Goldman Sachs’ $120-a-barrel scenario is therefore tied to the extent of any further disruption rather than a certainty that crude will reach that level.
For now, the combination of rising oil prices, threats against shipping and renewed military exchanges has put the Strait of Hormuz back at the centre of the global energy market risk outlook.