An executive at Goldman Sachs has warned that tensions in the Middle East will lead to lower oil prices globally, forcing the bank to raise its price target.
In a new interview with Bloomberg, Daan Struyven, Goldman Sachs head of global research, he says The bank does not see a sudden end to the global oil crisis, believing that only 90% of the oil produced in the Persian Gulf will be recovered by December.
According to Struyven, this disruption will lead to a global oil shortage this year.
“We estimate that every year the world will lose about 2 billion barrels of Persian oil by the end of the year. To put that into perspective, that means that about 20 percent of the world’s oil is found in the world.”
Struyven also says that current losses may be reflected in higher oil prices.
“Our Brent is rising to $90 a barrel by the fourth quarter. This is $30 higher than what we previously predicted would have been higher, about $100 a barrel if we didn’t include the major damage in demand. Now we are looking at the global oil demand to lose, although at the beginning of the year we wanted very strong barrels, we want more than one million barrels a day.”
At worst, Struyven predicts that BRENT will trade well above $100 in the last quarter of the year.
“But if you go to the problems that we are considering, where you get a month of another delay in the transport of the Persian Gulf and the damage to the oil production capacity, maybe the damage to the infrastructure or the possibility that the problem will not be opened more than 70%, in this case, we see Brent at $ 120, although the highest price can be very expensive.
And in that, the economic potential of different countries is rising, I would say, especially in countries that are at risk, emerging markets, Asia, Africa, border economies, and maybe even some European countries. “
At the time of writing, Brent Crude Oil (BRENT) is trading at $117 a barrel.
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