Oil prices could surpass $120 per barrel if disruptions in Strait of Hormuz don’t ease, says Goldman Sachs

Oil prices have been under pressure lately due to concerns over supply chain disruptions, and a recent warning from Goldman Sachs suggests that prices could surge even higher. According to the investment bank's analysts, if disruptions in the Strait of Hormuz, a critical waterway for oil shipments, don't ease, oil prices could surpass $120 per barrel.

This forecast is significant because the Strait of Hormuz is a vital passage for global oil supplies, with around 20% of the world's oil passing through it. Any prolonged disruption to traffic in the strait could have serious implications for global energy markets, leading to higher prices and potentially even shortages. The Goldman Sachs analysts see oil prices averaging $100 a barrel next year if traffic continues to be affected, which would be a substantial increase from current levels.

For fund managers, this development is worth watching closely, as it could have a significant impact on their portfolios. With oil prices potentially surging higher, investors may need to reassess their exposure to energy stocks and consider adjusting their strategies to mitigate any potential risks. The key thing to watch next is whether the disruptions in the Strait of Hormuz can be resolved quickly, or if they persist, leading to higher oil prices and potentially even more volatility in energy markets.

Originally reported by marketwatch.com. FundNews adds analysis for finance & markets readers.