Oil flows through the Strait of Hormuz have collapsed to just 3% of normal levels, according to Goldman Sachs, as tanker attacks continue to pile up, though futures markets are still pricing in a relatively short disruption.
The effective closure of the key shipping lane has led to Middle East crude production shut-ins reaching 6.3 million barrels per day across Iraq, Saudi Arabia, Kuwait, the UAE and smaller Gulf producers, the investment bank's analysts noted
In its latest oil tracker, published Tuesday night, Goldman put the total hit to Persian Gulf exports at 15.4 million barrels per day on a four-day moving average, a disruption it describes as 15 times larger than the peak impact of Russia's oil production cuts following the invasion of Ukraine in 2022.
Some partial rerouting is underway, with an estimated four million barrels per day being redirected via the Yanbu port on Saudi Arabia's Red Sea coast and the UAE's Fujairah terminal on the Gulf of Oman.
But Goldman said upside risks to its price forecast remain as long as the conflict lingers and tankers remain under threat.
Brent has pulled back from a peak of nearly $120 per barrel to around $90, with WIT crude at $87 a barrel.
Futures markets are pricing in a relatively short disruption, it was noted, with the Polymarket prediction markets now assigning a 30% probability that the conflict ends by March 31, up from 13% on March 4.
Goldman flagged that US retail gasoline prices have jumped 15% week on week to $3.63 per gallon, while Asian jet fuel prices have surged above 2022 levels after Middle Eastern jet fuel exports to Asia fell to zero.