30 March 2026 | 10:29PM EDT Commodities Research Oil Tracker: Risks to Red Sea Flows; Hormuz Flows Still Low Yulia Zhestkova Grigsby +1(646)446-3905 | yulia.grigsby@gs.com Goldman Sachs & Co. LLC Alexandra Paulus +1(212)902-7111 | alexandra.paulus@gs.com Goldman Sachs & Co. LLC Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Charts of the Day Exhibit 1: Flows Through the Bab-el-Mandeb Strait Are 2.7mb/d Higher Than Their 2025 Average But Still Below the 2023 Averages (Before Hou ...

What's priced in? The SOX has de-rated 20% since the start of the Middle East conflict to 20x NTM P/E, and now sits only 8% away from Liberation Day (April-25) levels at 18.7x, which is consistent with mid-cycle corrections as consensus NTM EPS continues to revise higher. Stocks are trading as if numbers are going to be cut, despite global Tech earnings up 6% since the Iran conflict started. The risk of further downside is if the market assumes: 1) this conflict is extended; 2) oil stays elevated well above ...

31 March 2026 | 8:58PM EDT Commodities Research Oil Comment: Pulsing Prices at the Pump Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Yulia Zhestkova Grigsby +1(646)446-3905 | yulia.grigsby@gs.com Goldman Sachs & Co. LLC Alexandra Paulus +1(212)902-7111 | alexandra.paulus@gs.com Goldman Sachs & Co. LLC Filippo Cuscito +44(20)7051-9073 | filippo.cuscito@gs.com Goldman Sachs International c45a43530f604d12bcb9a82b5aa6b9f6 1 We look at fuel price increases since early February as ...

March 30, 2026 04:37 AM GMT The Oil Manual | Europe Strait of Hormuz - Physical Air Pocket Arriving Now Four weeks in, the impact of the effective Hormuz closure is now spreading through the oil market. We leave our Brent forecasts unchanged, but near-term risks remain skewed to the upside. Key Takeaways Exhibit 1: Crude oil and refined products exports from the Middle East Gulf region have declined by more than 15 mb/d from their recent peak M Idea Morgan Stanley & Co. International plc+ Martijn Rats, CFA ...

Summary of J.P. Morgan Oil Flash Note Industry Overview - The report discusses the global oil market dynamics following the last tanker departure from the Strait of Hormuz on February 28, indicating a shift from a flow shock to a stock depletion problem, where timing is crucial for impact [1][7]. Key Points Regional Impacts 1. **Asia**: - Heavily reliant on Gulf crude, Asia is experiencing significant demand reductions, with Southeast Asia's demand expected to fall by approximately 300 thousand barrels per day (kbd) in April, potentially exceeding 2 million barrels per day (mbd) in May and approaching 3 mbd by June if OECD stock releases remain localized [3][14]. - Early signs of physical tightening are evident, with regional exporters prioritizing domestic markets and intra-Asian trade flows contracting [10]. 2. **Africa**: - Africa is expected to feel the impact by early April, with potential demand losses of up to 250 kbd if inland stocks are low [4][16]. - Countries like Kenya are already facing fuel shortages, while others like Tanzania maintain adequate stocks [13]. 3. **Europe**: - Europe is likely to experience impacts by mid-April, primarily through rising costs and competition with Asia rather than outright shortages. Approximately 1.1 mbd of imports are at risk, but higher inventories provide some insulation [5][20]. - European gasoline is being redirected to Asia due to more attractive margins, leading to price and allocation challenges [20]. 4. **United States**: - The U.S. is last in line to feel the effects, with California being the most exposed region due to its reliance on imports. The primary challenge will shift from scarcity to securing adequate replacements as flows from the Middle East decline [26][27]. - Initial impacts will manifest as price shocks, evolving into physical supply challenges by late April and May [28]. Inventory and Supply Dynamics - Global inventories fell by approximately 155 million barrels in the first three weeks of March, largely due to a 211 million barrel drop in oil in transit, indicating a significant drawdown [7][28]. - Onshore inventories remain stable, providing a temporary buffer against immediate shortages, but regional drawdowns are becoming apparent [29]. Refining Activity - Refining activity is already showing operational responses, with unplanned shut-ins in Asia reaching 1.0 mbd due to crude shortages, while limited capacity is coming back online in the Middle East [33]. Conclusion - The current phase of disruption is transitional, relying on existing buffers. As inland inventories decline, the impact is expected to spread beyond Asia to Africa, Europe, and the U.S., following the physical timeline dictated by shipping routes [35]. Additional Insights - The report emphasizes the importance of timing in the oil supply chain and the potential for escalating demand losses if stock releases are not managed effectively [2][10].

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **Global Oil Services** industry, particularly in the **Middle East** market, which is valued at approximately **$111 billion** [12][15]. - The industry is experiencing a potential resurgence reminiscent of the **1970s super-cycle**, driven by geopolitical factors and rising oil prices [4][10]. Core Insights and Arguments - The metaphor of the "wolf" represents the use of oil as a political weapon, with historical context provided from the **1973 oil crisis** [2]. - Oil prices have historically surged during conflicts, with prices increasing from **$2.50-3.50/bbl** (1948-73) to **$11.16/bbl** in 1974-75, and reaching **$37/bbl** by 1981 [3]. - **SLB (Schlumberger)** serves as a proxy for the oil services sector, showing significant growth during the last super-cycle, with revenues increasing **6x**, net income **14x**, and market cap **20x** from 1973 to 1980 [3]. - Current conditions suggest a new super-cycle may emerge due to: - An optimistic outlook for oil services prior to recent geopolitical tensions. - **90%** of current exploration and production (E&P) capital expenditures focused on maintaining production rather than growth. - A need for exploration after a **12-year decline** in activity. - New offshore basins with low breakeven prices [4]. Short-Term and Long-Term Outlook - In the short term, companies with low exposure to the Middle East and high exposure to North America, such as **Tenaris**, **Vallourec**, **Viridien**, and **SLB**, are expected to benefit [5][10]. - Potential downgrades in guidance from companies like **Technip Energies** could present buying opportunities, similar to past occurrences with SLB [5]. - The entire sector is expected to benefit from increased energy investments in North America, offshore, and gas in the medium term, with visibility extending to the mid-2030s [10]. Market Dynamics - The oil services sector has begun to re-correlate with oil prices after a period of de-correlation since 2022, indicating a medium-term positive outlook despite potential volatility [6]. - The market share analysis indicates that **US companies** hold a **32%** share of the Middle East oil services market, although this has been declining [17]. - The **Oil Field Services (OFS)** segment remains dominated by US companies, which hold a **67%** market share, with **SLB** leading at **29%** [19]. Segment Analysis - The **$30 billion OFS segment** shows strong US dominance, while the **$65 billion Engineering & Construction (E&C) segment** is characterized by fierce competition, particularly from Asian and European firms [22][25]. - The **$11 billion drilling segment** is described as a "regional sport," with local players increasingly taking over from international firms [27]. Important Metrics and Projections - The overall oil services market is projected to grow by **3%** in 2025, driven primarily by the E&C segment, which is expected to grow by **5%** [15]. - The report includes detailed market share projections for various companies within the OFS and E&C segments, highlighting competitive dynamics and growth opportunities [21][24]. Conclusion - The current geopolitical landscape and historical precedents suggest a favorable environment for the oil services sector, with potential for significant growth and investment opportunities in the coming years [10][12].

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the oil industry, particularly the impact of geopolitical tensions in the Persian Gulf, specifically related to the Strait of Hormuz and the ongoing conflict involving Iran. Core Insights and Arguments - **Oil Price Movements**: Brent and WTI crude prices increased by 6% and 5% respectively, reaching $108 and $94, amid mixed signals regarding the resolution of the Iran conflict [3][4][5] - **Geopolitical Developments**: President Trump announced a temporary pause in actions against Iran's energy infrastructure, with ongoing negotiations and a potential summit with President Xi planned for mid-May [3][4] - **Oil Flow Disruptions**: The estimated total disruption to oil flows from the Persian Gulf has decreased to 14 million barrels per day (mb/d), with Hormuz flows at only 6% of normal levels [3][4][5][6] - **Pipeline Redirection**: Increased flows through alternative routes, such as Yanbu and Fujairah ports, have risen to 8.3 mb/d, indicating a redirection of 5.2 mb/d above the 2025 average [3][4][5][6] - **Global Oil Stocks Impact**: A net hit to global commercial oil stocks is estimated at 13.1 mb/d, which is 3 mb/d larger than previous assumptions, reflecting a slower-than-expected policy response [3][4][5][6] - **Chinese Refinery Operations**: A moderate decline of 0.6 mb/d in Chinese refinery runs has been noted since the conflict began, although China has a buffer due to high pre-war crude stocks [3][4][5][6] - **Regional Price Tightness**: Price differences for crude and refined products are narrowing, indicating tightening conditions in the West [5][6] Additional Important Information - **Refinery Outages**: Nearly 2.5 mb/d of oil refining capacity in the Middle East is estimated to be offline due to the conflict [3][4][5][6] - **Policy Responses**: Several countries, including the US, are expected to begin releasing strategic petroleum reserves (SPR) to mitigate the impact of rising oil prices [3][4][5][6] - **Market Predictions**: The probability of the Iran conflict ending by mid-May is estimated at 54%, with various stakeholders providing differing timelines for resolution [3][4][5][6] - **Energy Consumption Adjustments**: Countries in Asia are implementing measures to reduce energy consumption, including workweek adjustments and state of emergencies due to energy shortages [3][4][5][6] This summary encapsulates the critical points discussed in the conference call, highlighting the current state of the oil industry amidst geopolitical tensions and market responses.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Global Financial Markets, specifically focusing on the impact of oil prices and central bank policies amidst geopolitical tensions, particularly the Iran conflict. Core Insights and Arguments 1. **Oil as a Market Driver**: Oil prices are a significant factor influencing global market rates, with volatility leading to inflationary risk premiums being priced into central bank rate expectations. For instance, UK 2-year rates increased by 35 basis points during a recent session, indicating a market reaction to rising oil prices [1][2][9]. 2. **Inflationary Pressures**: Higher oil prices are complicating the efforts of global central banks to maintain a 2% inflation target. The spike in oil prices has led to a hawkish repricing of central bank paths, affecting both short and long-term government yields [2][9]. 3. **Temporary Inflation Risk Premium**: Historical data suggests that oil price spikes create temporary periods of high inflation risk premiums that eventually correct. However, the duration and intensity of these premiums can vary, complicating planning for investors [3][9]. 4. **Central Bank Responses**: - The Federal Reserve (Fed) is expected to maintain a cautious stance, requiring strong labor market evidence and inflation impacts beyond energy prices before considering rate hikes [9][10]. - The European Central Bank (ECB) may need to implement 50-75 basis points of hikes to control inflation, but expectations for cuts remain in place for 2027 [10][11]. - The Bank of England (BoE) is also open to hikes but requires a more significant and persistent economic shock to justify such actions [11]. 5. **FX Market Dynamics**: The current geopolitical tensions are strengthening the US dollar, particularly against high-beta currencies. The expectation is for a stronger dollar in the near term, especially if the conflict escalates [5][6][9]. 6. **Long-term Outlook**: While the near-term outlook favors the dollar, there is a bearish sentiment for the dollar by year-end, contingent on no Fed hikes and normalization of energy supplies [13][47]. Additional Important Insights 1. **Market Positioning**: The underperformance of previously strong assets like gold and emerging market stocks indicates a broader market repositioning in response to geopolitical risks and inflation concerns [25][46]. 2. **Central Bank Uncertainty**: Central banks are adopting a hawkish tone but are providing limited guidance due to the prevailing uncertainty, which complicates market expectations [25][47]. 3. **US Consumer Resilience**: Despite various economic challenges, US consumer spending has remained robust, although rising gasoline prices pose downside risks to growth [15][19]. 4. **Fed Balance Sheet Management**: The Fed is considering reducing its balance sheet as a tool to combat inflation, which could have significant implications for market liquidity and interest rates [16][18][19]. This summary encapsulates the critical themes and insights from the conference call, highlighting the interplay between oil prices, central bank policies, and market dynamics amidst ongoing geopolitical tensions.

27 March 2026 | 1:57PM EDT Economics Research Global Markets Daily: TIPS During Oil Shocks TIPS During Oil Shocks Front-end inflation has repriced the oil shock, the long end has not Since the onset of the war, global front ends and breakeven curves have priced greater risk of higher near-term inflation. Our commodity strategists assume Hormuz flows remain at only 5% of normal through mid-April, corresponding to a $115/bbl Brent average in April. Accordingly, our economists have raised their 1-year-ahead (h ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the oil industry, particularly the dynamics surrounding crude oil prices and inventory levels in the context of geopolitical tensions, specifically between the US and Iran, and the implications for the Strait of Hormuz [1][6][10]. Core Insights and Arguments - **Price Volatility**: The base case anticipates continued economic challenges due to rising oil and gas prices, with potential shortages leading to macroeconomic impacts. Near-term prices could reach as high as $120, but may stabilize around $75 by the end of 2026 as disruptions ease [1][10]. - **US Oil Inventories**: Recent data indicates a build in US commercial crude oil inventories (+6.9 million barrels to 456.2 million barrels) and diesel (+3 million barrels to 119.9 million barrels), while gasoline stocks fell (-2.6 million barrels to 241.4 million barrels) [2][13]. - **Brent-WTI Spread**: The widening Brent-WTI spread is attributed to contrasting fundamentals in waterborne markets versus US inland markets, exacerbated by the closure of the Strait of Hormuz and the release of oil from the US Strategic Petroleum Reserve (SPR) [3][15]. - **Geopolitical Tensions**: Conflicting news regarding military escalation and diplomatic efforts between the US and Iran has led to fluctuations in Brent oil prices, which fell from over $110 to around $100 amid these developments [6][7]. - **Future Projections**: The report outlines various scenarios for oil prices, including a bull case where prices could reach $150 if the conflict escalates further, and a bear case projecting prices as low as $80 [8][11]. Additional Important Content - **US SPR Release**: The US is initiating a 172 million barrel release from its SPR as part of an IEA coordinated emergency release, with the first phase involving a current release of 45.2 million barrels [14][24]. - **Freight Rates Impact**: Increased freight rates have contributed to the widening Brent-WTI spread, which has risen from typical levels of $3-4 to around $10-11 due to heightened shipping costs and geopolitical tensions [15][26]. - **Inventory Dynamics**: The report highlights that while US inventories are building, many regions, particularly in Asia, are experiencing draws, leading to significant disparities in oil supply dynamics globally [3][13]. - **Market Sensitivity**: The ongoing geopolitical situation remains a critical factor influencing oil prices, with potential for rapid changes based on developments in US-Iran relations and regional stability [11][12]. This summary encapsulates the essential insights and data points from the conference call, providing a comprehensive overview of the current state and future outlook of the oil industry amidst geopolitical tensions.