Goldman Sachs: Oil could rise by $20 a barrel as Middle East tensions escalate

Oil prices could rise by $20 a barrel if Iranian production is affected, Goldman Sachs said. U.S. crude futures rose about 5% on Thursday and rose again on Friday morning amid concerns that Israel could strike Iran’s oil industry in retaliation for Tehran’s missile attack this week. According to estimates, Dan Struyven, co-head of global commodities research at Goldman Sachs, told CNBC that the decline in Iranian production threatens to push oil prices up by about $20 a barrel next year. Struyven said that this is assuming that OPEC+ refrains from responding by increasing production. He pointed out that if key OPEC+ members such as Saudi Arabia and the United Arab Emirates compensate for some of the production losses, oil markets could see a rise of about $10 a barrel. “In the event of a large-scale war in the Middle East over a threat to target Iranian oil facilities by Israel, Brent crude prices are likely to rise above $100 per barrel, with any potential closure of the Strait of Hormuz threatening prices of $150 per barrel or more,” said BMI, a subsidiary of Fitch Solutions, in a note.