Goldman Sachs warns oil may surge above $100/bbl if Hormuz flows don’t recover

The bank said it plans to revisit its oil price forecast soon if it does not see evidence supporting its assumption of a gradual normalization in Strait of Hormuz flows ⁠over the next few days.

Its current base‑case Brent forecast is in the $80s for March and the high $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," it added.

Crude oil was set on Friday for its strongest weekly gain since the extreme volatility of the COVID-19 ‌pandemic ⁠in spring of 2020, as conflict in the Middle East kept shipping and energy exports through the vital Strait of Hormuz halted.

Goldman Sachs currently estimates that average daily flows through the Strait of Hormuz are down 90%.

A spokesman for ⁠Iran’s Revolutionary Guards challenged U.S. President Donald Trump to deploy U.S. naval vessels to escort oil tankers through the Strait of Hormuz.

Trump demanded Iran's "unconditional surrender," a dramatic escalation of ⁠his demands a week into the attack he launched alongside Israel, which could make it more difficult to negotiate a swift end to ⁠hostilities.

Meanwhile, earlier in the day, Barclays said that Brent crude could potentially test $120 a barrel if the Middle East conflict persists for another couple of weeks.