Goldman Sachs sees freight costs posing upside risk to Brent forecast

Persistently expensive oil shipping could prompt an upward revision to Goldman Sachs’ Brent price forecast, the bank’s analysts said. They linked elevated freight costs to the Middle East conflict.

The bank’s note, reported by Interfax, put average global oil freight rates above $20 a barrel, compared with $3 a year earlier. Rates on Middle Eastern routes exceeded $35 a barrel.

The analysts attributed more than half of the annual increase to the risk premium for crossing the Strait of Hormuz and ship-to-ship transfers. They do not expect a substantial decline in freight costs before the US-Iran conflict ends.

Goldman’s baseline still assumes Brent falls to $90 a barrel by the end of 2026 and averages $80 in 2027. That scenario depends on regional production recovering and exports stabilising.

A rebound in Gulf exports could lower crude prices while increasing freight costs if additional shipments require transfers between vessels. The bank sees scope to raise its Brent forecast if high transport costs and the geopolitical premium persist.

At 13:06 Moscow time, December Brent futures on ICE Futures traded at $110.64 a barrel, up $1.85, or 1.7%. December WTI on NYMEX rose $2, or 2.04%, to $99.82.