Brent Oil to Remain in $80-$90 Range Pending U.S.-Iran Outcome, Goldman Sachs Says

Goldman Sachs expects Brent crude oil to remain within a tight $80 to $90 per barrel range until the market gets clarity on the U.S.-Iran conflict, the investment bank said in a research note on Tuesday. The firm stated that a confirmed nuclear deal or a significant military escalation are the two primary catalysts that could push prices out of this band.

Geopolitical Premium in Focus

According to Goldman Sachs, the current fair value for spot Brent is approximately $80 a barrel. This suggests that while Brent traded near $85 on Tuesday amid conflicting signals over diplomatic talks, markets are pricing in only a modest risk premium despite the ongoing uncertainty surrounding Middle East oil supplies.

The bank noted that prices had previously retreated after the U.S. delayed planned strikes on Iran and reports emerged of progress in managing tanker traffic through the Strait of Hormuz. However, the underlying physical market tells a different story.

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Physical Markets Continue to Tighten

Despite the range-bound price action, Goldman Sachs highlighted that physical oil markets are tightening significantly. The bank pointed to several key supply disruptions and inventory draws that underscore this trend.

• Global visible oil inventories fell by an estimated 6.3 million barrels per day (bpd) over the past two weeks.
• Gulf oil exports have plummeted to about 36% of pre-war levels on a seven-day moving average basis, down from nearly 80% in early July.
• Loaded tanker capacity in the Red Sea has dropped by 22% since the Iran-aligned Houthis announced a blockade.
• Russian crude and condensate exports declined by 1.3 million bpd over the last two weeks, compounded by disruptions at the CPC terminal in the Black Sea.
• Saudi Arabian oil exports are down 2.4 million bpd compared to a year ago, though some of this has been offset by rerouting shipments through Egypt's SUMED pipeline.