Goldman Sachs flags 5% Hormuz flow drop

Goldman Sachs said on May 20 that flows through the Strait of Hormuz had fallen about 5%, a sign that the oil market was still absorbing severe disruption in one of the world’s main crude transit routes. The bank tied the decline to supply risks and inventory draws that have kept pressure on prices. Brent crude traded above $108 a barrel on May 19, according to market reports cited in social posts tied to Reuters coverage. The warning came as U.S. and global oil stockpiles were already under pressure from weeks of disrupted Gulf exports. ### Why does a 5% flow figure matter so much? The Strait of Hormuz is a major oil chokepoint, and the U.S. Energy Information Administration said on May 12 that nearly 20% of global oil supply had flowed through it before military action that began on February 28. The agency said the strait had been effectively closed to shipping traffic since then, sharply reducing available supplies to world markets. (energynow.com) Goldman Sachs had already warned on April 15 that reduced Hormuz flows were the biggest upside risk to its oil-price forecasts. In that earlier note, cited by Reuters, the bank estimated flows were still running at 10% of normal, or about 2.1 million barrels per day. The May 20 reference to flows falling about 5% indicated a further deterioration from those already depressed levels. (eia.gov) ### What did Goldman Sachs say was driving prices? Goldman Sachs linked the latest move to supply disruption risks and inventory draws, according to the May 20 context provided for the story. The bank’s earlier Reuters-cited note said global visible oil inventories were drawing down, even if the pace had eased in the prior week. (energynow.com) Brent crude traded at $105.29 on May 19, with an intraday range of $104.02 to $108.55, according to Capital.com market data published that day. That trading range aligns with reports that Brent moved above $108 as Middle East tensions and lower Hormuz flows kept a risk premium in the market. (energynow.com) ### Are inventories falling in the United States and globally? Goldman Sachs said inventory draws were part of the immediate market signal behind its warning, according to the story context. Reuters had previously reported, via a Goldman note on April 15, that global visible oil inventories were still declining, though at a slower pace than earlier in the conflict. (capital.com) The U.S. Energy Information Administration said on May 12 that the Hormuz disruption had created cascading effects across oil supply chains and pushed Brent to an April average of $117 a barrel, up $46 from February. The agency said fewer physical barrels for near-term delivery had widened market dislocations and increased volatility. (energynow.com) ### How long do official forecasts say this could last? The U.S. Energy Information Administration said on May 12 that it expected the Strait of Hormuz to remain effectively closed through late May, with flows slowly starting to resume in late May or early June. The agency also said most pre-conflict production and trade patterns might not return until late 2026 or early 2027. (eia.gov) Capital.com, citing Reuters reporting from April 26, said Goldman Sachs had pushed back its expectation for Hormuz normalization to end-June from mid-May. That forecast was tied to 14.5 million barrels per day of Middle East output losses and record inventory drawdowns. ### What should readers watch next? (eia.gov) June 9 is the next scheduled release date for the U.S. Energy Information Administration’s Short-Term Energy Outlook, which will update official assumptions on Hormuz traffic, oil inventories and Brent prices. Goldman Sachs, OPEC-related supply data and daily Brent trading levels will remain the named markers investors and refiners follow in the next round of market updates. (capital.com) (eia.gov)