Oil above US$100 may persist as Goldman warns rally not over
Investors brace for prolonged disruption after Iran closed the Strait of Hormuz, sending crude to levels unseen since the 2022 energy shock
Crude oil’s surge above US$100 a barrel could last longer than expected, reshaping investors’ outlook for the global economy and injecting fresh volatility into risk assets as military tensions in the Middle East show no sign of easing, according to analysts.
Brent crude jumped 23 per cent to US$114.14 a barrel in London on Monday, while West Texas Intermediate (WTI) rose 24 per cent to US$113.11. Traders are increasingly pricing in a prolonged supply disruption after Iran closed the Strait of Hormuz last week.
Both benchmarks are now trading at levels not seen since 2022, when prices spiked following Russia’s invasion of Ukraine.
Oil could climb beyond its 2022 peak – and potentially challenge the record set in 2008 – if the Strait of Hormuz, a chokepoint handling about one-fifth of global crude flows, remained closed through March, Goldman Sachs said.
The US investment bank last week raised its average price forecast for Brent by US$10 to US$76 a barrel for the second quarter, and lifted its West Texas Intermediate outlook by US$9 to US$71, warning that risks remained tilted to the upside.
Deutsche Bank said a worst-case scenario could see oil surge as high as US$200 a barrel, a shock that could force central banks to confront a mix of slower growth and accelerating inflation.