Oil News Summary: Brent Nears $96 as Hormuz Flows Drop and Houthi Threats Grow

Key Points

• Goldman Sachs predicts Brent crude oil prices could exceed $120 in Q4 if disruptions in the Hormuz Strait continue and Gulf oil flows remain restricted.
• Current Gulf crude oil flows have decreased to below 45% of pre-war levels, contributing to Brent prices nearing $95 as the situation in Hormuz worsens.
• The Houthi threats of blockades are jeopardizing Saudi Arabia’s Red Sea export route, which serves as a crucial backup for oil supply.

Market Overview

Brent crude oil is approaching the $96 mark, driven by worsening supply conditions. According to Goldman Sachs, less than half of the pre-war Gulf crude oil flows are currently passing through the Hormuz Strait. Additionally, the backup route for Saudi Arabia through the Red Sea is now at risk due to Houthi blockade threats. This situation is compounded by tightening diesel supplies, as damage to Russian refineries is further constraining fuel availability. The only potential bearish scenario hinges on a ceasefire, which remains elusive as neither party has agreed to it.