Goldman Sachs Flags New Tightening in Gulf Oil Flows

Goldman Sachs highlights fresh tightening signals in the physical oil market and the associated upside price risks.

Geopolitical Strain on Gulf Flows

■13.4 million barrels of daily Gulf flow shortfall is projected.

■Renewed attacks on tankers in the Strait of Hormuz have pushed flows below 50% of prior levels.

■After the US‑Iran agreement, export volumes initially rose above 80% of pre‑war levels, but new attacks have slashed daily shipments to 11 million barrels.

Brent’s Upward Momentum

■Brent has rebounded to the $80 range, with a fourth‑quarter risk of breaching $110.

■Goldman maintains its Brent forecasts at $80 for 2026 Q4 and $75 for 2027, while noting that upward risks remain in the near term.

Demand Outlook and Stock Build‑Up

■China’s crude imports fell by 5 million barrels in June year‑on‑year, suggesting a bottomed‑out demand curve.

■With 1.9 billion barrels of stock, China holds roughly 117 days of supply.

■Middle‑East producers may boost exports if official selling prices are cut for July‑August.

Price Scenarios and Market Implications

■Upside scenario: If Gulf exports fail to recover, Brent could exceed $110 in Q4.

■Downside scenario: Should production outpace expectations and demand recover slowly, Brent may slide to the $60 range by year‑end.

Markets are interpreting sustained geopolitical tension as a catalyst for tighter liquidity and inventory constraints that support prices. Yet, uncertainty around Chinese demand and the threat of new embargoes could amplify price volatility. Goldman Sachs's outlook signals that investors should factor both short‑term shocks and mid‑term price revisions into their risk‑management frameworks.