Goldman Sachs: If shipping attacks in the Middle East intensify, oil prices may soar to $120; long positions in natural gas and diesel are recommended.

(1) Daan Struyven, Co-Head of Global Commodities Research at Goldman Sachs, stated that recent events indicate the risk of broader and more severe shipping disruptions cannot be ignored; the bank has set its oil price upside scenario target at $120 per barrel. If Middle East exports return to normal, the downside target is $80 per barrel (Brent crude is currently near $97 per barrel). (2) Amid the current situation, the United States and Iran remain in a standoff in the Strait of Hormuz, and crude oil prices have risen to their highest level since July; recently, the US attacked Iranian tankers, while Iran established new control zones outside the Strait. At the same time, the US Navy continues to blockade Iranian ports and escorts vessels from other oil-producing countries. (3) Given these risks, Goldman Sachs recommends going long on natural gas and diesel to seek returns.