Goldman Warns Oil May Hit $120 Amid Middle East Escalation

Brent crude is trading close to $97 a barrel, prompting fresh warnings from Goldman Sachs that prices could soon surge to $120. The updated outlook follows a sharp shift in foreign policy, as Washington abandons diplomatic talks with Iran in favor of a strict blockade and military strikes.

Daan Struyven, co head of global commodities research at Goldman, pointed out that the $120 target is very likely if regional shipping attacks widen and intensify. Meanwhile, global energy reserves are feeling the strain. Research firm Energy Aspects notes that oil inventories outside China have dropped by more than 400 million barrels since the conflict started, pushing global reserves near a critical tipping point.

Energy markets are already reacting to the tight supply, with diesel prices climbing to record highs. Traders and analysts are watching the Persian Gulf closely for any new shipping restrictions or disruptions to key energy facilities, which could trigger immediate volatility across broader financial markets.