While its base case is that Brent declines to around $60/bbl in Q4 assuming no supply disruptions, Goldman said the $10/bbl premium appears justified in light of its lower Iran supply scenario where Brent spikes just above $90, and tail scenarios where broad regional oil production or shipping is negatively affected.
The Iran-Israel conflict has raised fears of potential supply disruptions in the Middle East, a key oil-producing region, pushing crude prices higher as traders react to the growing geopolitical risk.
President Donald Trump kept the world guessing on Wednesday whether the U.S. will join Israel’s bombardment of Iranian nuclear and missile sites, as residents of Iran’s capital streamed out of the city on the sixth day of the air assault.
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Iran is OPEC’s third-largest producer, extracting about 3.3 million barrels per day (bpd) of crude oil.
Brent crude futures settled 25 cents higher at $76.70 a barrel on Wednesday, while U.S. West Texas Intermediate crude rose 30 cents at $75.14.
Separately, Barclays said on Wednesday that if Iranian exports are reduced by half, crude prices could rise to $85 per barrel and that prices could move past $100 in the “worst-case” scenario of a wider conflagration.
Goldman said that the 45% decline in oil flows through the Bab-El-Mandeb Strait — which connects the Red Sea to the Indian Ocean — in 2025 versus 2023 illustrates the vulnerability of shipping to attacks from Iran-controlled Houthis.
(Reporting by Anjana Anil in Bengaluru; Editing by Sandra Maler and Leslie Adler)
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