New Delhi: The escalation of tensions between Israel and Iran has reignited a surge in Brent crude oil prices, something that had seemed a distant possibility just weeks ago, with the oil producing nations’ grouping OPEC+ eyeing a decline in demand owing to a slowdown in the Chinese economy.
However, the latter concern has also been addressed by the Dragon Nation with the announcement of a record stimulus package by the Chinese state, as well as a reduction in policy rates by the People’s Bank of China.
Tensions remain in the Middle East with the possibility of further escalation of conflict not ruled out. Israel has vowed to retaliate in response to a barrage of missiles launched by Iran earlier this week. This followed the assassination of a top Hezbollah leader by Israel last week.
Goldman Sachs oil price forecast
Goldman Sachs has predicted a $10-20 per barrel rise in crude oil prices, citing a potential hit to global supply from any disruptions to Iran’s oil output. The US brokerage forecasted a rapid escalation to $90 per barrel if OPEC is able to offset Iran’s supply deficit. This may rise to mid-$90 per barrel range if OPEC fails to offset the shortage, Reuters reported, citing a report from Goldman Sachs.
The forecast was based on a scenario where Iran’s oil supplies may be disrupted resulting in a deficit of 2 million barrels per day for 6 months. A 1 million barrel per day shortage may drive the rates up to mid-$80 per barrel range if OPEC is able to gradually offset the shortfall.
How will crude perform in 2024?
Goldman Sachs in its report stated that Brent crude prices are likely to move in the $70-85 per barrel range. The average price forecast was pegged at $77 per barrel. Oil prices soared over 8 per cent in the week ending October 5, 2024, to $78.05 per barre. This is the highest weekly surge registered by the benchmark since January 2023. To be sure, US President Joe Biden indicated that a potential strike on Iranian oilfields was not a solution favoured by the US.
US brokerage giant Goldman Sachs has given a $10-20 per barrel upside price forecast for Brent crude in 2025. Here’s why Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
