Goldman Sachs predicts that Brent crude oil prices could rise to $110 per barrel, an increase over 80% from May's near $60. This forecast is significantly influenced by rising tensions with Iran, which account for 20% of the world's oil transport through the Strait of Hormuz. Analyzing potential supply drops, if tanker traffic reduces by half, prices may initially shoot up, influencing gasoline and heating oil costs. As a result, low and middle-income households could feel substantial financial strain, affecting overall consumer spending in the economy.
The exact figure of $110 is based on the assumption that oil tanker traffic through the Strait of Hormuz would decrease by half for a month.
Higher oil prices not only affect gasoline costs but also significantly impact heating oil, jet fuel, and petrochemical industries, driving inflation across the economy.
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