NEW DELHI — Goldman Sachs has raised its forecast for Brent crude to $90 per barrel for the fourth quarter, citing prolonged supply disruptions caused by the closure of the Strait of Hormuz.
The brokerage also projected U.S. West Texas Intermediate crude at $83 per barrel, as the ongoing disruption continues to tighten global oil supply.
Analysts said the closure has led to “extreme” inventory drawdowns, with an estimated 14.5 million barrels per day of production losses from the Persian Gulf. Global stockpiles are declining at a record pace of up to 12 million barrels per day in April.
The supply shock, driven by the U.S.-Iran conflict and a near halt in shipments through the key Strait of Hormuz, has significantly altered the global oil balance.
Markets are now expected to face a deficit of about 9.6 million barrels per day in the current quarter, compared with a surplus a year earlier.
Brent crude prices have already surged nearly 50 percent since tensions escalated in late February, with futures trading above $100 per barrel, raising concerns about inflation and potential pressure on global economic growth.
Goldman Sachs warned that the current pace of inventory drawdowns is unsustainable, adding that either supply must recover or demand destruction could intensify if disruptions continue.
The firm expects a slower recovery in Gulf oil exports, now projecting normalization by the end of June rather than mid-May, reflecting continued geopolitical uncertainty.
Separately, JPMorgan said oil markets are being forced into rapid rebalancing as supply disruptions widen, estimating global losses of nearly 14 million barrels per day in April.
With spare production capacity largely inaccessible due to the Hormuz disruption, the adjustment burden has shifted to inventories and demand, the bank said.
JPMorgan added that even modest supply shocks can trigger sharp price increases due to inelastic demand, warning that further gains may be needed to fully rebalance the market.
Morgan Stanley said oil exports from the Persian Gulf have dropped by more than 14 million barrels per day, contributing to a steep decline in global inventories.
Despite some easing in geopolitical risk premiums following signs of a potential ceasefire, Goldman Sachs said risks to oil prices remain skewed to the upside, especially if supply disruptions persist.
Brent crude was trading at $108.09 per barrel, up 2.62 percent, while U.S. West Texas Intermediate rose 2.47 percent to $96.74 during intraday trading. (Source: IANS)
