Goldman says high freight costs pose upside risk to its Brent forecast
USO•Goldman Sachs said global crude freight rates are more than seven times higher than a year ago, posing upside risk to its Brent forecast while Middle East conflict persists. Global rates rose above $20 a barrel from $3, while rates on Middle Eastern routes exceeded $35.
1. Freight rates surge
Goldman Sachs said the global average crude freight rate rose above $20 a barrel from $3 a year ago, while rates on Middle Eastern routes climbed above $35. The bank said war-risk premiums for crossing the Strait of Hormuz and ship-to-ship transfers account for more than half of the year-over-year increase.
2. Risks to oil outlook
The bank said freight rates are unlikely to fall sharply while the Middle East conflict persists, posing upside risk to its Brent forecast. Higher freight costs are widening price differences between crude grades and supporting refined-product prices, but weighing on refiners’ net margins.
3. Baseline forecast
Goldman’s baseline scenario has Brent falling to $90 a barrel by year-end and averaging $80 in 2027. The bank said Gulf production recovery and stable exports would still require ship-to-ship transfers without reliable navigation through the Strait of Hormuz, and that increased attacks on shipping, infrastructure damage and a stickier geopolitical risk premium could add upside risk to its forecast.
