Goldman Hikes Oil Forecasts Again as Hormuz Shock Builds

追加: 2026-05-05

[00:00:00]Yeah. So briefly, it looked like we were on track for a normalization in Hormuz. Flows by by mid-May when on that Saturday morning we did see a big pick up in flows.

[00:00:10]When on Friday Iran did communicate to the street was was open but and it turned out that very quickly flows dropped back again.

[00:00:18]And over the last few days actually flows have been lower, roughly 5% of normal levels versus a 10% of normal levels since the start of the war.

[00:00:27]On average, you know, we've gone sometimes down from day to day and headlines go back and forth and trying to make sense.

[00:00:33]And there are times markets react and other times markets are like, we're not going to touch this one. We're just kind of waiting.

[00:00:38]How do you know? How do you have the conviction that you think this is going to be going on for much longer?

[00:00:44]Yeah. So in this environment where there's so much uncertainty about the geopolitical impacts, but and also the logistics and shipping inputs, I think the value that we provide to investors is tracking now, casting what's going on, and then mapping scenarios for supply demands and taking some geopolitical assumptions and translating that into enterprise and trying to help investors, you know, to think about those those different scenarios. Our conviction is stronger on the pricing framework than on the exact set of duplicate assumptions.

[00:01:15]What we'll go ahead. But is there an assumption that I mean, we've seen no talks this weekend. You're assuming like I think the latest we were talking about that maybe Iran offered opening up the strait and putting the nuclear, you know, the uranium kind of on the side for now.

[00:01:31]The talks about the uranium, correct. That's like here's uranium.

[00:01:34]We're going to put it this Saturday at the talks.

[00:01:36]Yeah, let's just let it out. Right.

[00:01:38]But I mean, how do you gauge what to kind of trust?

[00:01:43]Because I think the thinking has been, you know what?

[00:01:45]It's just it's going to happen. And one day it can be like everything's fine, back to normal. It doesn't go back to normal quickly, does it? No, Especially on the production side.

[00:01:53]We expecting that even by December, the recovery in oil production in the Persian Persian Gulf as a percent of lost supply will only be around 90%.

[00:02:04]So still 10% of the lost supply in our basket is not back right by the end of the year, which is significant, right? Yeah.

[00:02:10]We estimate that the world will lose cumulatively about 2 billion barrels of Persian oil production by year end. To put that in perspective, you know, that is, you know, roughly 20% of global oil inventories in the whole world.

[00:02:30]Wow. Look.

[00:02:32]So demand destruction that we're seeing.

[00:02:36]So we'll see as a result of this. I just I talked to a colleague last week who was set to fly to Cincinnati this summer to watch the Cincinnati Open.

[00:02:45]He loves tennis. You can get closer to the players than you can at the U.S. Open.

[00:02:49]It all sounds great. Until he looks at ticket prices to get to Cincinnati, he was saying it was like six, $600.

[00:02:56]He's now not going. Yes.

[00:02:58]And I thought to myself, that is demand destruction as a result of higher energy costs. What's the price tag you're putting on that right now? Yeah.

[00:03:05]So the longer the most supply shock plus the more the rebalancing mechanism will shift from energy drawdowns, which you cannot do forever to demand destruction via via higher prices. We are seeing a pretty significant demand destruction exactly in the jet fuel aviation market, also in petrochemical feedstocks, especially in Asia.

[00:03:28]And, you know, we we do think that if this lasts longer, that's a market you may have to rebalance. Yes.

[00:03:35]Significantly higher product prices as opposed to crude prices.

[00:03:38]Ultimately, product prices are what consumers and businesses ultimately pay our Brent upgrades to $90 a barrel by the fourth quarter.

[00:03:47]That's $30 higher almost than our forecast before that would be even higher, around $100 per barrel if we did not incorporate some significant demand losses. We now look for global oil demand to stagnate, even if at the start of the year we were looking for pretty solid well, demand growth just above a million barrels per day.

[00:04:08]Okay, so let's pull out a little bit further, Don.

[00:04:11]Do you expect that there's going to be and of course, Europe and Asia impacted differently from the United States, but eventually it all trickles down.

[00:04:19]So is a recession, a global recession a part of this?

[00:04:23]It's not our base case. But if you go to the severely adverse scenario that we that we consider where you get one month of additional delays in normalization of Persian Gulf export flows and some damage to oil production capacity, either damage to infrastructure or the possibility that the strait never opens more than 70%. Well, in that scenario, we see Brent at 120, even by the fourth quarter, product prices arguably would be significantly higher as well. And in that scenario, you know, the probability of recession for there is a. Economies goes up.

[00:05:01]I would say especially in in countries that are more vulnerable.

[00:05:05]You know, GM, Asia, in Africa, frontier economies, potentially some European countries as well. Mm hmm.

[00:05:10]We'll look at Pakistan in the way that Pakistan has a vested interest, not just from a national security and economic perspective in getting this war done, but from a diplomatic perspective as well.

[00:05:21]I mean, you look at what's happening in that country.

[00:05:22]You mentioned Europe. What countries in Europe do you think could be most affected? So, yeah, in Europe, with the exception of, you know, Norway and the U.K., everybody's a major net importer of oil and gas. From a natural gas perspective, Italy is the most vulnerable, whereas countries such as, for instance, Spain, have made a lot of progress in increasing the share of solar and other renewable sources in their in their power power sector.

[00:05:51]But overall, Europe is pretty pretty Well, what about here in the United States? Because we're even though, you know, we don't rely on oil from the from that travels through the Strait of Hormuz, who are most to the same extent that other countries do.

[00:06:06]We're still seeing WTI up over $96 a barrel right now.

[00:06:11]Anyone who's filled up their tank knows that we're not diesel, especially diesel. And the flows are on diesel to all the products that we buy, you know, produce other cargoes.

[00:06:20]What's the effect on the U.S. and sort of how long as how long does that go? Yeah.

[00:06:25]So initially the surge in refined products and crude prices was very much an east of Suez, eastern part of the world phenomenon.

[00:06:34]But when you see shortages means the extremely high prices in the Middle East and Asia, markets do their work and they bring, for instance, diesel and gasoline and crude from the U.S., too, to the east.

[00:06:46]And we have seen pretty sharp drawdowns in U.S.. Refined products stocks in the last couple of weeks.

[00:06:52]In fact, the U.S. is pretty much its full export capacity for crude and products. We're starting to face some pipeline constraints, port constraints. And so the more two U.S.

[00:07:01]experts that provide some relief to the rest of the world, but it's it sort of narrows this gap between prices in the rest of the world and the U.S.

[00:07:09]It's a pretty global market. The oil market different from the gas market. Yeah, I love that you went there.

[00:07:14]I am thinking about lessons on the other side of this mean I'm going to make the assumption that at some point we do get to the other side of this.

[00:07:20]I think about Covid and what we learned about global supply chains.

[00:07:24]What do you think are the lessons that we will ultimately learn off of this?

[00:07:28]The need to invest in several energy sources to diversify supply in a world where supply concentration is high, where commodities are often used as a source of economic and geopolitical leverage, you may argue that it could accelerate the transition to commodities that you can produce at home, such as solar, renewables, renewables, perhaps coal.

[00:07:50]Yeah. I also suspect that many countries will follow China's path in building very high strategic reserves not only of oil, but of plenty of critical commodities that are that you're importing from the rest of the world. But there's also a lesson for Iran here, and that is how powerful it is to close the strait and the power that it has over the rest of the world as a result of this critical waterway.

[00:08:14]Yeah. Yes.

[00:08:16]It was interesting that one of the Indonesia policy officials, you know, it did mention that, you know, they don't they don't rule out starting to consider tolls for the strait, the Strait of Malacca.

[00:08:29]So I think how this conflict is settled may set an important precedent for future management of of water waterways. On that, just quickly, though, if you're charging to on all the oil that comes out of the Gulf, that automatically then is going to increase the cost, right? Or no?

[00:08:50]So the burden will ultimately be either on the Gulf producers that produce oil at pretty low cost. So you could imagine that their margins get reduced. The other potential impact is higher prices for it for the rest of the world. For the rest of the world.

[00:09:05]Hey, before you go back to sort of the beginning here and you thinking what the fourth quarter price of Brent's going to be.

[00:09:13]At what point will you say I'm comfortable lowering my price prediction there or raising it? Like at what point, you know, where it's April 27th right now? Mm hmm.

[00:09:25]So when we say we either have to raise or lower this thing.

[00:09:29]Yeah. I think if the supply or demand fundamentals significantly surprise our base case, I could imagine upgrading the forecast if supply takes more time to normalize.

[00:09:41]I could imagine lowering the forecast if supply comes back more quickly.

[00:09:44]But I think our our base case is already, you know, close to a realistic best case possible. One scenario where you could see a downgrade is if demand losses are bigger than expected.

[00:09:53]Now, that could be a mixed bag for the global economy if that's because, you know, we work more from home, we switch to.

[00:09:59]Energy sources, the damage to GDP could be limited a little bit like during COVID. We, you know, human ingenuity.

[00:10:05]Right. Limited the damage and allowed to recover quickly. The flipside could be if it's as a result of weaker GDP, especially from frontier economies, it's bad news for the global economy.