Goldman Sachs: Hormuz Reopening Sparks $10-A-Barrel Angolan Discount, Brent Falls Below $75
GS•Goldman Sachs co-head of global commodities Daan Struyven said the Strait of Hormuz reopening has unleashed a surge of cargoes, driving Angolan crude discounts to nearly $10 a barrel under Dated Brent. Benchmark Brent plunged below $75 a barrel for the first time since the war began, down roughly 50% from April highs.
1. Commodity Supply Surge
Reopening of the Strait of Hormuz has accelerated oil shipments from the Persian Gulf, overwhelming key markets with an influx of cargoes. This sudden increase follows earlier strategic inventory releases and reduced Chinese demand, tipping some regions into oversupply.
2. Market Price Movements
Angolan crude, traditionally snapped up by Chinese buyers, is now trading at discounts near $10 a barrel below Dated Brent, the widest in over a decade. Benchmark Brent fell under $75 a barrel for the first time since the war, marking a roughly 50% decline from its April peak above $140.
3. Goldman Sachs' Commentary
Daan Struyven, co-head of global commodities at Goldman Sachs, noted that Middle Eastern grades have shifted into a bearish contango structure, signaling weak near-term demand. He highlighted that buying today is now cheaper than tomorrow, reflecting rapidly easing tensions and replenished flows.
4. Outlook and Implications
While oversupply pressures may persist, inventory drawdowns used to smooth the Hormuz reopening could curb some excess. The International Energy Agency forecasts a surplus in 2027, but refilling stocks might soak up portions of the current glut, potentially stabilizing prices later.
