Goldman Sachs: Middle East oil exports are still resilient, but the risk is rising, oil may rise above $120 next year

The Zhitong Finance App learned that Goldman Sachs released a research report saying that the price of Brent crude oil had risen to close to 110 US dollars because Saudi Arabia was involved in its 7 million barrels per day east-west oil pipeline after being attacked last Thursday (10th), and that Iran and other Gulf countries had postponed the Hormuz Strait shipping meeting. The bank estimates that total oil exports to the Persian Gulf have recently risen slightly to about 16 million to 17 million barrels per day (about 70% of the level before the outbreak of the Iraq war). It can be seen that exports are only about 13 million barrels per day (7-day moving average), and the net impact on Persian Gulf exports is about 6.7 million barrels per day.

The bank pointed out that the amount of oil affected and the duration of the outage are still highly uncertain. The attack on the east-west pipeline in April of this year reduced oil flow by 700,000 barrels per day, but only lasted four days; recent attacks are worse, and could threaten the remaining 2 million barrels per day in recent Yanbu port (Yanbu) exports. Saudi oil exports fell by 2.8 million barrels per day in August, as Yanbu's loading volume fell below 2 million barrels per day, but exports in the past two weeks have rebounded to the June average, which is expected to reflect a shift from Red Sea ports to eastern ports. Saudi Red Sea exports are still 3.3 million barrels per day below the June average, but exports through Hormuz and other eastern ports have increased 3.3 million barrels per day since June.

The bank believes that the attack on petroleum infrastructure marks a marked escalation of the conflict and increases the probability of an upward scenario in oil prices. That is, if the average Gulf production in 2027 is still 4 million barrels per day lower than pre-war levels, the price of Brent oil could exceed 120 US dollars. According to recent estimates, crude oil production in the Persian Gulf in August decreased by 1.2 million barrels per day compared to July, which meant that the cumulative production loss was about 7.1 million barrels per day; the market may have turned into a larger shortage in August. External estimates and visible inventory consumption averaged a deficit of about 3 million barrels per day, which is higher than the bank's estimate.