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Flows Redirect to Limit Impact on Crude from Red Sea Disruption: Goldman


Disruption to energy flows through the Bab-El-Mandeb strait is unlikely to have a large impact on crude oil and LNG prices according to Goldman Sachs. Production should not be directly affected due to vessel redirection opportunities.

  • Spot crude prices would be boosted by 3-4$/bbl relative to long-dated prices from a hypothetical prolonged redirection of all 7mb/d of gross (northbound and southbound) oil flows.
  • Longer journeys of approximately 15 days would rise oil on water by about 100mbbls and reduce the availability of global commercial inventories.
  • A full redirection could increase clean tanker freight rates by $4/bbl (55%) and dirty tanker freight rates by $1/bbl (25%) and raise refined products in the importing New York Harbour and North West Europe regions.

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