Goldman Sachs Flags Strait of Hormuz Risks as Crude Oil Price Recovery Faces Fresh Uncertainty

Goldman Sachs has warned that the recovery in Middle Eastern oil production could lose momentum if shipping disruptions continue in the Strait of Hormuz, a critical route for global crude exports. The investment bank said renewed geopolitical tensions have increased uncertainty around oil supplies even as producers in the Persian

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Gulf continue restoring output.

In a research note dated July 8, Goldman Sachs said crude production across the Persian Gulf remained around 10.5 million barrels per day below pre-conflict levels in June. The bank noted that producers have begun reopening previously shut wells over the past month, but any prolonged disruption to maritime traffic through the Strait of Hormuz could slow the pace of recovery.

Crude Oil Price Remains Sensitive to Shipping Risks

The latest assessment comes after Brent crude oil price briefly moved above $80 per barrel this week following renewed military exchanges between the U.S. and Iran. Shipping activity through the Strait of Hormuz has weakened after attacks involving both countries heightened concerns over the security of commercial vessels.

According to Goldman Sachs, tanker operators may remain cautious while uncertainty persists over the security situation in the region. The bank said the recent attacks underline the continuing operational risks for vessels using the strategic waterway, which carries a significant share of global oil exports.

Crude oil prices have been reflecting these developments, with markets closely watching shipping activity and political developments in West Asia.

Oil Flows Yet to Return to Normal Levels

Goldman Sachs estimated that oil shipments through the Persian Gulf have fallen back to roughly 70% of normal levels following the latest tanker attacks. Earlier, cargo movement had recovered to more than 80% of pre-conflict levels within the first 10 days after shipping resumed through the Strait of Hormuz.

The bank said the outlook remains balanced, with developments over the coming weeks likely to determine the direction of energy markets. If negotiations between the U.S. and Iran continue over the proposed 60-day period, accompanied by security assurances for shipping companies and renewed flexibility on Iranian crude exports, oil flows could recover by the end of July.

However, Goldman Sachs cautioned that a breakdown in negotiations or further attacks on commercial vessels could reduce shipments again, keeping crude oil price elevated and delaying supply normalisation.

Market Continues to Watch Geopolitical Developments

U.S. President Donald Trump said the interim understanding between Washington and Tehran had ended, while his administration also withdrew a waiver that had allowed Iranian oil sales. At the same time, he indicated that diplomatic engagement with Iran could still continue.

Last month, Goldman Sachs had lowered its oil price forecasts after shipping activity through the Strait of Hormuz improved. The bank had also highlighted the possibility of excess crude supply returning to global markets if production normalised. The latest developments suggest that geopolitical risks remain a key factor influencing oil supply expectations and the near-term direction of the crude oil price.