Goldman Sachs outlines a scenario where oil prices jump to US$110 / bbl

Goldman Sachs:

• Says while they still assume no significant disruptions to oil & natural gas supply, downside risks to energy supply & upside risk to its energy price forecasts have risen
• Says the Polymarket prediction market now sees a high chance that Iran will disrupt the Strait of Hormuz in 2025
• Says if only Iran supply were to drop by 1.75MB/d, it estimate that Brent would rise to a peak of around $90/bbl
• “If oil flows through the Strait of Hormuz were to drop by 50% for one month & then were to remain down 10% for another 11 months, we estimate that Brent would briefly jump to a peak of around $110”
• Expects European natural gas (TTF) and LNG markets to also price a somewhat higher probability of a large supply disruption, with TTF rising closer to the 74 EUR/MWh ($25/MMBtu)

This article was written by Eamonn Sheridan at www.forexlive.com.