Goldman Sachs Raises Oil Price Forecasts as Middle East Output Falls

Goldman Sachs has increased its oil price forecasts for the fourth quarter, predicting Brent crude at $90 per barrel and West Texas Intermediate (WTI) at $83. The bank cited reduced output from the Middle East as a key factor. Oil prices extended gains on Tuesday, with ongoing efforts to resolve the US-Iran conflict showing little progress. The main shipping route in the region remains largely closed, restricting global access to Middle Eastern energy supplies.

Key Highlights

• Goldman Sachs raises Q4 Brent crude forecast to 90 dollars per barrel
• Middle East output cuts and Strait of Hormuz closure disrupt global oil supply
• US-Iran negotiations remain deadlocked with no resolution in sight
• Brent and WTI crude futures rise for seventh consecutive day
• Ship-tracking data shows major disruptions in regional oil tanker movements

Oil Prices and Market Movements

As of 0051 GMT, Brent crude futures for June rose by 45 cents, or 0.4 percent, reaching $108.68 per barrel. This follows a 2.8 percent gain in the previous session, marking the highest close since April 7. The contract has now risen for seven consecutive days. WTI crude for June increased by 58 cents, or 0.6 percent, to $96.96 per barrel after a 2.1 percent gain in the prior session.

Goldman Sachs attributes the price increases to ongoing supply disruptions. The shutdown of the Strait of Hormuz, which typically handles about 20 percent of global oil and gas consumption, has significantly impacted the market. The US continues to enforce a blockade of Iranian ports, further limiting supply.

US-Iran Negotiations and Regional Impact

Efforts to end the US-Iran conflict remain stalled. US President Donald Trump has expressed dissatisfaction with Iran's latest proposal, according to a US official. Iranian sources stated that Tehran's offer does not address its nuclear program until hostilities end and Gulf shipping disputes are resolved. This has left the conflict at an impasse.

Recent negotiations between the US and Iran collapsed after unsuccessful face-to-face talks last week. Market analyst Fawad Razaqzada from City Index and FOREX.com noted that the physical flow of crude oil is now more important to traders than political rhetoric. He added that even if a resolution is reached, production outages and logistical challenges could delay recovery for months.

Shipping Disruptions and Regional Data

Ship-tracking data shows significant disruptions in the region. Six Iranian oil tankers were forced to turn back due to the US blockade. However, a liquefied natural gas tanker managed by Abu Dhabi National Oil Co from the United Arab Emirates successfully crossed the Strait of Hormuz and was near India as of Monday. Before the US-Israeli war on Iran began on February 28, between 125 and 140 vessels transited the strait daily.

The ongoing conflict and shipping disruptions continue to affect global energy markets. The situation remains fluid as diplomatic efforts stall and supply constraints persist.