Goldman Sachs Warns of Oil Supply Risks Amid Strait of Hormuz Tensions
A leaked memo from Goldman Sachs surfaced on social media recently, alerting that a prolonged closure of the Strait of Hormuz could lead to significant reductions in global oil supplies.
The document posed the question, “Will we run out of oil?” and explored various aspects like product availability, price fluctuations, and anecdotal evidence suggesting that certain countries may experience serious oil shortages or even complete depletion of essential fuels like fuel oil and gasoline. Though the study was intended to remain private, it was shared by several users on social media after its release on Friday.
“Our three-way analysis indicates that many Asian countries are already facing critical shortages of petrochemical feedstocks (like naphtha and LPG),” the memo stated, noting that these shortages have been evident since April.
When approached for comment, Goldman Sachs chose not to respond.
One user on social media, ChrisO_Wiki, detailed a dramatic 94% decline in shipping through Hormuz since the onset of the Iran conflict. This situation may leave several Southeast Asian nations completely in the dark, with no fuel oil for heating purposes.
According to the report, countries such as China, India, Japan, South Korea, Malaysia, Thailand, and Taiwan are predicted to lose 100% of their fuel oil supplies. The U.S. would also be heavily impacted, seeing around 60% of its supplies vanish.
Despite the dire outlook, the U.S. could lose only about 3% of its diesel and jet fuel supply, the report indicated. However, it anticipates a 13% reduction in naphtha supplies. If the situation persists with zero exports, gasoline inventories might dwindle by just 1%.
The report also pointed out that most major nations have an average stockpile of crude oil sufficient for at least 40 days, except for the UK, which has only 14 days’ worth. As strategic reserves are tapped to fill supply gaps, it was noted that any continued lack of production from the Strait could make rationing unavoidable, exacerbating the shortages. A map from JPMorgan indicated that the last tanker shipments of jet fuel would likely reach the U.S. and Europe around mid-April.
The analysis warned of severe consequences, including rationing caused by material shortages, demand destruction (like flight cancellations and factory shutdowns), and rising prices as Asian countries are forced to pay higher rates to redirect oil tankers toward the West.
This warning comes as tensions escalate between the U.S. and Iran, particularly following President Trump’s fiery remarks urging Iran to “open the Straits.” His comments were amplified by another warning about dire repercussions if the strait remained closed.
Airlines are already feeling the sting, with United Airlines raising fees for checked bags as gasoline prices in the U.S. jumped above $4 a gallon—up from less than $3 just weeks earlier.
