Daan Struyven of Goldman Sachs said each month of delay in normalizing oil supply adds $10 [1] to year-end oil prices.
This projection suggests that the timing of supply recovery is critical for global energy costs. If producers fail to stabilize output quickly, the resulting price surge could impact inflation and economic growth globally.
Struyven, who serves as the co-head of global commodities research at Goldman Sachs, said the estimate during a discussion on market volatility. The analysis focuses on the correlation between the speed of supply normalization and the eventual cost of crude oil by the end of the calendar year.
According to Struyven, the market is highly sensitive to these delays. He said that every month of delay in normalizing oil supply adds $10 [1] to year-end oil prices.
The projection underscores the volatility inherent in global commodity markets, where geopolitical tensions or production quotas can shift pricing rapidly. As the market monitors supply levels, the financial implications of a slow recovery become more pronounced for consumers and industries alike.
“Each month of delay in normalising oil supply adds $10 to year-end oil prices”
This analysis indicates a direct linear relationship between the duration of supply disruptions and the magnitude of price increases. If the market fails to normalize supply in a timely manner, it creates a compounding effect that elevates the price floor for the end of the year, potentially straining global economies that are sensitive to energy price shocks.
