In an exclusive interview, we had the opportunity to speak with Daan Struyven, Co-Head of Global Commodities Research at Goldman Sachs, who offered valuable insights into how recent geopolitical tensions could influence oil prices.
As concerns rise over a potential Israeli strike on Iran’s oil infrastructure in retaliation for missile attacks from Tehran, we’ve seen significant swings in oil prices. After a nearly 5% jump on October 3, U.S. crude futures continued to climb on October 4.
Struyven commented, “If Iranian production continues to fall by a million barrels per day, we might witness a peak in oil prices of around $20 per barrel next year.” This estimate assumes that OPEC and its allies won’t ramp up production to alleviate the crisis. If key OPEC+ nations like Saudi Arabia and the UAE step in to counteract these losses, the price increase could be moderated, potentially rising by less than $10 per barrel.
Industry experts are raising alarms about the real threats posed to global supply. Should Iran’s oil infrastructure be targeted by Israeli attacks, approximately 4% of the world’s crude oil supply could be endangered.
Kavonich, a senior energy analyst at MST Marquee, expressed particular concern about Kharg Island, which accounts for 90% of Iran’s oil exports, suggesting it could be a likely target. He warned that the broader ramifications of such attacks could ignite a more extensive conflict, posing risks to navigation safety through the Strait of Hormuz.
Additionally, a recent report from BMI, a research firm under Fitch Solutions, warns that in the event of a full-blown war, Brent crude prices could soar to $100 per barrel. If the Strait of Hormuz were to be closed, prices could potentially spike to $150 per barrel or more.
