Goldman described an upside case where crude climbs to $120 per barrel if assaults on maritime traffic across the Middle East widen and intensify. It also sketched a cooler outcome at $80 if exports/) from the region return to normal. As of the latest trade, Brent hovered near $97. Daan Struyven, the firm's co-head of global commodities research, walked through the setup on Bloomberg TV.
"Events over the last few days do suggest that the risk of shipping disruptions broadening and intensifying is an important one," Struyven said. The backdrop: crude has risen to its strongest level since July, with the US and Iran still facing off around the Strait of Hormuz. Over the past few days, Washington attacked Iranian tankers, Tehran declared a new restricted zone beyond the strait, and US naval forces have continued a blockade of the Islamic Republic's ports while guiding other producers' ships out.
More than six months of war have lifted a wide range of energy prices, and the pop in natural gas and refined products has outpaced crude. Diesel, the industrial workhorse, has more than doubled this year.
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"While we see meaningful upside to crude oil prices, we do recommend to investors to hedge geopolitical risks by going long in global natural gas and refined-oil products," Struyven said, adding that "the supply shocks are bigger than in the crude market." He also expects China to keep acting as a stabilizing force in crude by trimming imports when prices run hot, but said it is not playing that moderating role in natural gas or refined products. Translation for your wallet: if the standoff worsens, the pinch could show up first in gas and diesel, not just the headline crude quote.
