A top analyst at investment bank Goldman Sachs (GS) says that crude oil prices could rise by $20 U.S. per barrel if Iranian production is disrupted in coming weeks.
Daan Struyven, Goldman Sachs’ co-head of global commodities research, said on CNBC that “If you were to see a sustained one million barrels per day drop in Iranian production, then you would see a peak boost to oil prices next year of around $20 per barrel.”
The comments come after crude oil prices closed 5% higher on Oct. 3 as tensions in the Middle East continue to escalate.
West Texas Intermediate (WTI) crude oil, the U.S. benchmark, rose 5.39% to finish trading at $73.89 U.S. per barrel.
Brent crude oil, the global standard, climbed 5.22% to $77.76 U.S. a barrel.
Both WTI and Brent crude oil are now in positive territory for the year, with each benchmark up about 1%.
Heading into October, oil prices had been at multi-year lows due to demand concerns in China, the world’s largest crude importer.
The surge in oil prices comes as markets await Israel’s response after Iran fired missiles at the country. There is speculation that Israel may strike Iran’s oil facilities.
Analysts and traders say there is a real possibility that the widening conflict in the Middle East will disrupt global crude oil production, which could further raise prices.
The rapid rise in crude prices has sent stocks of oil producers higher. Exxon Mobil’s (XOM) stock has risen 8% in the past five days to trade at $122.58 U.S. per share.
