Goldman Sachs: Hormuz Tensions May Delay Middle East Crude Supply Recovery
Taylor Wilson
Goldman Sachs warned on July 8 that Persian Gulf oil flows have dropped from over 80% back to roughly 70% of pre-war levels after tanker attacks, putting the Middle East supply recovery on a two-way knife-edge.
How large is the Middle East supply gap?
Goldman estimates Persian Gulf output in June remained about 10.5 million barrels per day below pre-war levels.
This means → even with producers restarting shut-in wells, actual recovery is nowhere near closing the gap.
In plain terms = the wells are coming back online, but output is still less than half of what it was.
Why did strait flows suddenly reverse?
In the first ten days after the Strait of Hormuz reopened, flows briefly recovered to over 80% of pre-war levels.
After recent tanker attacks, flows fell back to roughly 70% of normal.
This means → transit risk has pushed shipowners back to the sidelines — with the ceasefire unclear, shipping companies are unwilling to sail through.
Which way does the oil price go from here?
Goldman flags two-way risk: if the 60-day negotiations continue, backed by security guarantees for shipowners and a new Iran oil-sales waiver, flows should recover by end of July.
But if talks collapse and tanker attacks escalate, flows could fall further.
This reflects a price dynamic no longer driven by supply-demand fundamentals — it hinges on one political variable: whether negotiations survive.
What does Trump's latest move signal?
Trump declared this week that the US-Iran interim ceasefire is "over" and revoked sanctions waivers that had allowed Iran to sell oil on the open market.
Brent crude futures briefly returned above $80 per barrel.
Yet Trump added that talks "may still continue." In plain terms = he shut the door but left the window open — the market is forced to price two scripts at once.
Could Goldman's own call be wrong?
Last month Goldman cut its oil-price forecast as strait flows recovered, warning that an oversupply risk could re-emerge.
This means → if the situation keeps deteriorating, that freshly lowered forecast will need to be revised right back up — the current trajectory is a real-time stress test of Goldman's own call.
Content is for reference only, not financial advice.