Iran war sparks oil shock but not broad supply-chain crisis, Goldman says

Oil prices have climbed more than 70% this year after US and Israeli strikes on Iran, with Brent trading around $105 per barrel and West Texas Intermediate near $99.50 in early trade. Goldman Sachs says the surge is driving an oil shock but that broader supply chains should hold up.

Goldman's economists describe today's shock as concentrated in the energy sector, unlike the 2021–22 episode when energy was one aspect of a much wider global supply-chain and inflation surge. They estimate the oil rally could reduce global GDP by about 0.3% and raise headline inflation by roughly 0.5 to 0.6 percentage points over the next year, and now see global growth of 2.6% down from 2.9% before the war, with headline inflation of 2.9% on a fourth-quarter basis.

Global trade exposure to the Middle East is relatively small outside oil and gas: non-energy trade with Gulf economies accounts for only about 1% of global trade, limiting the risk that disruptions ripple through supply chains.

Iran, Middle East

iran war, oil prices, brent, wti, goldman sachs, oil shock, supply chains, global gdp, headline inflation, gulf economies