Goldman Sachs has sounded the alarm on the global energy markets, forecasting that crude oil prices could soar to $100 per barrel within this week (which it did on Monday) and potentially reach $150 by the end of the month. The investment bank attributes this sharp rally to severe disruptions in oil flows through the Strait of Hormuz, a critical chokepoint for global energy supplies.
Analysts at Goldman highlight that the current disruption in the Strait of Hormuz is of unprecedented scale, with oil flows through the passage down by a staggering 90%. The bank notes that this disruption is 17 times larger than the Russian supply shock witnessed in 2022, which had already sent ripples through the global economy following Russia’s invasion of Ukraine.
The Strait of Hormuz is a vital artery for energy trade, as approximately 20% of the world’s oil supply passes through this narrow gateway each day. With such a significant portion of global oil exports blocked, Goldman Sachs describes the situation as the biggest energy supply crisis since 2008.
