Escalating combat in the Middle East could push oil prices toward $120 per barrel. Mounting risks to commercial shipping have prompted Goldman Sachs to urge investors to hedge geopolitical exposure by buying natural gas and diesel.
Tensions around the Strait of Hormuz are intensifying. The United States has struck Iranian tankers and is enforcing a maritime blockade of the republic’s ports while escorting allied merchant vessels. Tehran has responded by declaring its own restricted shipping zones. Against that backdrop, Brent futures have topped July highs, trading above $97 per barrel, while WTI crude has risen to $92.
Analysts say the $120 scenario would materialize only if the conflict widens. If exports from the region normalize, prices could retreat toward $80. However, the half‑year crisis has hit refined products hardest, with diesel prices more than doubling this year.
According to Daan Struyven, co‑head of global commodities research at Goldman Sachs, gas and diesel are the most vulnerable to supply disruptions. China remains the lone moderating force in crude markets, pragmatically cutting imports whenever prices spike. However, Beijing plays a much smaller stabilizing role in refined fuels and natural gas markets, making those products prime instruments for betting on further geopolitical turmoil.
