Source: Sharecast
The bank said it was considering two types of oil disruption scenarios: 1) reductions in Iran supply only, and 2) broader disruption of regional oil production or shipping.
"If only Iran supply were to drop by 1.75mb/d, we estimate that Brent would rise to a peak of around $90," Goldman said.
"If oil flows through the Strait of Hormuz were to drop by 50% for one month and then were to remain down 10% for another 11 months, we estimate that Brent would briefly jump to a peak of around $110."
The bank said that while it still assumes no significant disruptions to oil and natural gas supply, the downside risks to energy supply and the upside risks to its oil, European natural gas (TTF), and LNG price forecasts have risen.
It said that with the caveat that liquidity in prediction markets is limited, Polymarket now sees a 52% chance that Iran will close the Strait of Hormuz in 2025 versus just over 30% on Friday, but a less elevated probability of a closure of the Strait before July of 34%.
Goldman said that while the events in the Middle East remain fluid, "economic incentives, including for the US and China, to try to prevent a sustained and very large disruption of the Strait of Hormuz would be strong".
