Goldman Sachs Analyst Predicts Strait of Hormuz Oil Flow Normalizing by Late 2027, Crude Oil Prices to Hit $80/Barrel
As oil flows out of the Strait of Hormuz and the Middle East has reportedly exceeded pre-war levels, Goldman Sachs Group Inc. (NYSE: GS ) analyst Nikhil Bhandari said that the movement could likely stabilize in the second half of next year. $80/bbl Crude Oil? In an interview with CNBC on Monday, Bhandari said that refineries outside the Middle East and Russia would hit maximum stretch levels by March next year and that refinery operations in the Middle East and Russia could take longer “given some damage to the infrastructure.” Read Also: Iran’s Economic Crisis Explodes as Oil Minister Quits Amid $2 Billion Revenue Allegations and Rial Collapse — Scott Bessent Says Pressure ‘Will Not Stop’ Bhandari said dark fleet movement has also resulted in oil movement increasing. He was also asked when the Strait of Hormuz would open up. “Our baselines are that the full normalization of the flows will happen sometime by second half of next year,” the analyst said, adding that the scenario would result in oil stabilizing at around $80/bbl. He added that the crack spread, which is the profit that refineries earn to convert crude oil into fuel, has to stay “much higher” than the usual $20 spread
As oil flows out of the Strait of Hormuz and the Middle East has reportedly exceeded pre-war levels, Goldman Sachs Group Inc. (NYSE: GS ) analyst Nikhil Bhandari said that the movement could likely stabilize in the second half of next year. $80/bbl Crude Oil? ” Read Also: Iran’s Economic Crisis Explodes as Oil Minister Quits Amid $2 Billion Revenue Allegations and Rial Collapse — Scott Bessent Says Pressure ‘Will Not Stop’ Bhandari said dark fleet movement has also resulted in oil movement increasing.
He was also asked when the Strait of Hormuz would open up. “Our baselines are that the full normalization of the flows will happen sometime by second half of next year,” the analyst said, adding that the scenario would result in oil stabilizing at around $80/bbl. He added that the crack spread, which is the profit that refineries earn to convert crude oil into fuel, has to stay “much higher” than the usual $20 spread despite the flow of oil stabilizing. Bans Do Not Work Bhandari also spoke about the effectiveness of bans or restrictions of fuel, as the President Donald Trump administration was mulling a ban on diesel exports, which he later ruled out.
Prices have hit record highs in the recent weeks. Trump also signed an executive order on Monday allowing the sale of red-dyed diesel for highway use temporarily. On possible restrictions imposed by China, Bhandari said that it was a “high probability” event that China would restrict their product exports. “Domestic product inventories are quite heavily depleted locally within China.
So focus on product exports is likely going to be less,” he said. S. ” Read Also: Chris Wright Hails Europe's 100 Million-Barrel Oil Release After Trump’s SPR Push: 'Will Deliver Tremendous Benefits for American Farmers' Check out more of Future Of Mobility coverage by following this link. Image via Shutterstock