Goldman Sachs warns: If attacks on vessels in the Middle East escalate, oil prices could rise to 120 dollars.

Goldman Sachs has warned that if the shipping attacks in the Middle East escalate further, international oil prices could rise to $120 per barrel. The bank also advised investors to capitalize on potential gains by going long on natural gas and diesel. "The events of the past few days indeed indicate that the risk of a broader and intensified disruption in shipping cannot be ignored," said Daan Struyven, co-head of global commodities research at Goldman Sachs, in an interview. Recently, crude oil prices have rebounded to their highest level since July, as the standoff between the U.S. and Iran over the Strait of Hormuz remains deadlocked. In recent days, the U.S. military has launched attacks on Iranian oil tankers, while Iran has declared new no-sail zones outside the strait. The U.S. Navy continues to block Iranian ports and escort tankers from other oil-producing countries through the strait. Struyven mentioned that, besides the $120 per barrel bullish scenario, Goldman Sachs also set a target price of $80 if exports from the region return to normal. Brent crude is currently trading around $96. The prolonged standoff, now over six months, has pushed a range of energy prices higher, with natural gas and refined products seeing larger increases than crude oil. The price of industrial fuel diesel has more than doubled this year. "While we believe that there is considerable room for further increases in crude oil prices, we recommend that investors hedge geopolitical risks by going long on global natural gas and refined products," Struyven stated, noting that "the supply shocks faced by these commodities are more significant than those in the crude oil market." Struyven also pointed out that China is expected to continue playing a "stabilizing role" in the crude oil market, corresponding with a reduction in import demand when oil prices are high. However, China has not played the same regulatory role in the natural gas and refined products markets.