Oil price breaks through 89 dollars and Goldman Sachs warns: 100 dollars is realistic

The oil price is rising rapidly due to the war in the Middle East. Brent crude, the international benchmark, broke through $89 a barrel for the first time in almost two years and is already up more than 20% this week. Shipping through the Strait of Hormuz has virtually come to a standstill and Goldman Sachs warns that $100 is in sight.

Qatar even warns of 150 dollars per barrel

Goldman Sachs is not the only one sounding the alarm. Qatar’s energy minister told the Financial Times that oil prices could rise to $150 a barrel within two to three weeks if tankers can no longer pass through the Strait of Hormuz. About 20 million barrels of oil passed through that strait every day last year, according to the International Energy Agency.

The impact is already visible. European diesel futures are up more than 50% this week, a record move.

Conflict spreads throughout the Gulf region

The conflict began last week when the US and Israel launched a military campaign against Iran. Since then, neighboring countries have also suffered. Iran carried out missile and drone attacks on Qatar, the UAE, Saudi Arabia, Oman and Bahrain. Israel again carried out air strikes on targets in Iran.

Safety risks, insurance issues and continued uncertainty have brought commercial shipping through the Strait of Hormuz to a virtual standstill.

Governments intervene with emergency measures

Governments worldwide are looking for ways to limit the consequences. The US is considering releasing oil from its strategic reserves. Washington also gave India a brief exemption to buy Russian oil that was already stuck at sea due to previous sanctions.

China has asked refiners to limit exports of diesel and gasoline. Japan is considering releasing oil from its strategic reserves. A prolonged disruption could reignite inflation at a time when many countries are trying to get price increases under control.