Key facts
- Goldman Sachs warns renewed Persian Gulf hostilities threaten global oil supplies.
- Disruptions in the Strait of Hormuz could impede oil production recovery.
- Tanker traffic through the Strait of Hormuz has significantly decreased due to recent attacks.
- Global crude and refined petroleum stockpiles are at multi-decade lows.
Goldman Sachs has shifted its outlook on global oil supplies, moving from a prediction of an impending glut to a warning of potential disruptions due to renewed hostilities in the Persian Gulf. The bank's commodity analysts noted that while Middle Eastern producers had begun to increase output, disruptions in the Strait of Hormuz could hinder this recovery. They highlighted that Middle East oil production remains significantly below pre-war levels.
Recent attacks on tankers have underscored the elevated risks associated with crossing the Strait of Hormuz, leading shippers to hesitate and consequently impacting oil flows. Prior to the latest escalation, oil traffic had recovered to 80% of pre-war levels, but has since fallen to 70%. There are indications that this reversal may intensify, with reports of no observable tanker traffic in the Strait of Hormuz, except for one U.S.-sanctioned vessel.
This development contrasts with Goldman Sachs' assessment from the previous week, which assumed that the recovery in tanker traffic was irreversible and that the coming race to rebuild depleted oil inventories would not be sufficient to offset a future market glut. The current situation has led to global crude and refined petroleum stockpiles reaching multi-decade lows, as governments had previously released strategic reserves. This depletion, coupled with the restart of wells by Gulf producers, had led some analysts to anticipate a period of elevated oil prices as storage facilities were refilled.