Goldman Sachs’ Daan Struyven says oil is being driven by how quickly Strait of Hormuz flows normalize. His base case is near current pricing with Persian Gulf flows normalizing by end-June and Brent around $90 in Q4, but he warns every month of delay adds about $10 to year-end prices.
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This CNBC clip is a focused interview on the oil market after a sharp run-up in WTI and Brent. The host introduces Daan Struyven, co-head of global commodities research at Goldman Sachs, and asks how to think about oil prices amid fast-changing Middle East headlines. Struyven says the key variable is when supply from the Strait of Hormuz comes back. In his base case, flows recover soon and Persian Gulf oil flows normalize by the end of June, which would leave Brent around $90 in the fourth quarter. …
Tactically, oil stays vulnerable to headline shocks until Hormuz flows visibly normalize; any delay keeps upside pressure alive and leaves the market prone to another squeeze. Watch U.S. fuel prices and inventory prints for signs that politics or demand destruction could override the current base case.
Over the next few weeks, the base case is a partial unwinding if supply normalizes by end-June, but each additional month of disruption raises the price path materially. Confirmation would come from steadier flows and easing draws; failure would keep the market in a higher-for-longer tightness regime.
The longer-run implication is that oil is increasingly a logistics-and-chokepoint asset, not just a production-volume asset. When inventories are lean, geopolitical disruptions can force large re-pricings and even policy distortions between domestic and global markets.
Oil prices are highly contingent on when supply from the Strait of Hormuz comes back.
Central thesis tying price direction to supply restoration timing.
In the base case, Persian Gulf oil flows normalize by the end of June and Brent is around $90 in the fourth quarter.
Explicit base-case price forecast and timeline.
Every month of delay in supply normalization adds about $10 to year-end oil prices.
Quantified upside sensitivity to prolonged disruption.
How do you try and figure out where oil prices are headed amid rapidly changing Middle East headlines?
Struyven says the path depends mainly on when supply from the Strait of Hormuz returns, with a base case of quick recovery and normalization by end-June.
Is the rise in prices due to inventory drawdowns and the difficulty of juggling demand?
He says the market has absorbed the shock through commercial and strategic inventory drawdowns, but the longer it lasts, the more likely demand destruction becomes.
Could the U.S. restrict exports if domestic prices get too high, and what would that mean?
He says it is plausible though not the base case; it would likely widen the gap between higher international prices and lower U.S. prices in the short term.
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