Goldman Sachs warns: If Middle East ship attacks intensify, oil prices may rise to $120

According to information from Zhihu Finance APP, Goldman Sachs has warned that if shipping attacks in the Middle East further escalate, international oil prices could rise to $120 per barrel. The bank also recommends that investors go long on natural gas and diesel to capture related gains.

"Events in recent days indeed show that the risks of wider and more severe shipping disruptions cannot be ignored," said Daan Struyven, Co-Head of Global Commodity Research at Goldman Sachs, in an interview.

Recently, crude oil prices have rebounded to the highest levels since July, while the standoff between the US and Iran around the Strait of Hormuz remains deadlocked. In the past few days, US forces attacked Iranian oil tankers, while Iran established new no-sail zones outside the strait. The US Navy continues to blockade Iranian ports and escort oil tankers from other producing countries out of the strait.

Struyven stated that, besides the $120 per barrel upside scenario, Goldman Sachs also set a target price of $80 if exports from the region return to normal. Brent crude oil is currently trading near $96.

The prolonged conflict, lasting over six months, has pushed up a variety of energy prices, with increases in natural gas and refined oil products outpacing that of crude oil. The industrial fuel diesel has more than doubled in price this year.

"Although we believe crude oil prices still have considerable upside, we advise investors to go long on global natural gas and refined oil products to hedge against geopolitical risks," said Struyven, adding that "the supply shocks for these varieties are more significant than in the crude oil market."

Struyven also noted that China is expected to continue playing the role of a "stabilizing force" in the crude oil market, reducing import demand when oil prices are high. However, in the natural gas and refined oil markets, China has not played the same moderating role.