A week after warning of an impending global oil glut, Goldman Sachs reversed its outlook, saying renewed hostilities in the Persian Gulf now pose a risk of prolonged oil supply disruptions.
"While Middle Eastern producers have started reopening their shut-in wells over the last month, Hormuz disruptions could slow down the production recovery," the bank’s commodity analysts said, reported Bloomberg on Thursday.
The bank also stated that Middle East oil production stood at 10.5 million barrels daily.
The analysts elaborated that before the latest U.S.-Iran conflict escalation, oil flows had recovered to 80% of pre-war levels; however, as the situation has worsened, the recovery has come down to 70% of the pre-war level and is likely to worsen amid subdued tanker traffic.
At the time of writing, Brent crude oil price was trading 0.67% higher at $77.11 per barrel, while the WTI crude futures were trading 0.83% up at $74.12 per barrel.
