• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 6 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days The United States produced more crude oil than any nation, at any time.
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 12 hours Bad news for e-cars keeps coming
  • 2 days China deletes leaked stats showing plunging birth rate for 2023
  • 4 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
Could Taiwan’s Energy Crisis Derail the AI Boom?

Could Taiwan’s Energy Crisis Derail the AI Boom?

Taiwan's energy crisis poses significant…

How EVs Could Provide Renewable Energy Storage To Support the Grid

How EVs Could Provide Renewable Energy Storage To Support the Grid

Bidirectional charging technology allows electric…

China's No Limits Friendship with Russia is Beginning to Crumble

China's "No Limits" Friendship with Russia is Beginning to Crumble

China's relationship with Russia reexamined…

City A.M

City A.M

CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and…

More Info

Premium Content

Goldman: Oil Prices Could Double if Houthi Attacks Continue

  • Houthi rebels have attacked commercial shipping more than 20 times since November, using various methods.
  • Major shipping companies like Maersk and Hapag Lloyd are avoiding Red Sea and Suez Canal routes due to security concerns.
  • Operation Prosperity Guardian was initiated by the U.S. to protect commercial traffic, with support from other countries like the UK, Australia, and Canada.
Oil prices

Houthi rebel disruptions reaching the Straits of Hormuz could double oil prices, Goldman Sachs has warned.

In an interview given to American television station CNBC yesterday, head of the company’s oil research division Daan Struyven said: “the Red Sea is a transit route and a prolonged disruption there, oil can be three or four dollars higher.

“However if you have a disruption in the Strait of Hormuz for a month, [oil] prices would rise by 20 per cent and could even eventually double if the disruption there lasted for longer,” he said.

Despite caveating that the situation was “highly unlikely”, Struyven’s comments join a collective of voices from across international business and politics decrying the situation in recent days.

Yesterday, former prime minister now foreign secretary David Cameron said in an interview to Sky News that the attacks “have to stop”.

“This is not just a British interest, it is global,” he said.

“The clear message, and over ten countries have signed a letter to the Houthis saying that these attacks are illegal and have got to stop and if they don’t, action will be taken.”

 Since November, the rebels have attacked commercial shipping in the Red Sea more than 20 times using missiles, drones, fast boats and helicopters. 

In response, the U.S. in December announced Operation Prosperity Guardian to step up patrols of the Red Sea and Gulf of Aden to protect commercial traffic – ships from the UK, Australia and Canada are among the other countries also involved.

Early-mid December saw the occasional minor oil price spike as a result of the actions, but the volatility has remained largely subdued as the wider market remains soft.

More significantly however has been the reaction of major shippers to the protective responses such as Prosperity Guardian.

Maersk and Hapag Lloyd, two of Europe’s largest shipping companies, have refused to use the Red Sea and Suez Canal routes, the former having had a vessel come under attack from rebels last weekend.

What began as seemingly isolated disruptions to Western commercial activities are now being seen by many to constitute targeted action in support of the Hamas cause as Israel continues to ramp up its attacks on Palestine.

ADVERTISEMENT

Should they continue, they are likely to throw the already-chaotic state of global shipping in that area into further strife.

By City AM

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on January 06 2024 said:
    Prices could only double ( and only for a short period) if both the United States and Israel decide to retaliate against the Houthis and in so doing bring Iran and its allies into the side of Hamas thus widening the war and plunging the word in a most disastrous global energy crisis.

    In such a situation Iran will block the Strait of Hormuz through which 20 million barrels of oil a day (mbd) and 12 percent of global gas pass every day.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News