Total Gulf oil exports are back at two-thirds of pre-war levels, says Goldman's Daan Struyven

Summary

Daan Struyven of Goldman Sachs discusses the oil market on Power Lunch, focusing on Gulf/Middle East oil exports and Chinese crude demand. He says total Gulf exports are back to roughly two-thirds of pre-war levels, leaving the market in deficit and likely requiring higher prices to rebalance if exports do not recover further. He also notes signs of Chinese crude import demand picking up from low levels and that Goldman recently raised its oil price target by $5 per barrel.

• Goldman Sachs raised its oil price target by $5 per barrel.
• Gulf oil exports are estimated at about two-thirds of pre-war levels, or 16 million vs 23 million barrels per day.
• The oil market remains in deficit, and prices may need to rise further to curb demand if Middle East exports do not recover.
• A 10% reduction in Middle East exports is estimated to add about $20 to crude fair value.
• Chinese crude import demand is showing signs of picking up from low levels.
• Supply disruptions are being partially offset by adaptation, including weaker Asia demand, dark flows, and pipeline usage.
• The recent oil rally reflects fears of low Middle East exports and signs of China returning to the market.