Energy Markets Demand Destruction Phase

Goldman Sachs warns that the prolonged closure of the Strait of Hormuz is forcing energy markets into a 'demand destruction' phase, as inventories reach critical levels.

Key Takeaways

• 1.Global supply buffers are draining rapidly due to a 90% reduction in vessel transits through the Hormuz maritime chokepoint.
• 2.Oil markets will likely require price-driven demand destruction to clear, as returning to pre-conflict flows could take until early 2027.
• 3.A total loss of Middle Eastern crude supply could hit global GDP by 2%, with South Korea (-8%) and India (-7%) being the most vulnerable.

Table of Contents

• Goldman Warns Energy Markets Face Demand Destruction Phase
• Exhibit 4: A Complete Loss of Middle Eastern Crude Oil Supply Would Likely Lower Global GDP by 2%
• Exhibit 5: Downstream GDP Exposure to Middle East Goods Supply
• Exhibit 6: In an Extreme Scenario Where Goods from the Middle East Are Critical for Production

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial