Goldman Sachs Warns of Soaring Diesel Prices Amid Geopolitical Tensions
Goldman Sachs has significantly raised its forecast for diesel margin prices due to geopolitical tensions affecting global oil supplies. The bank now predicts a $63 per barrel premium over Brent crude in the US and $49 in Europe by year-end, up from earlier estimates before the war in Iran began. These increases are attributed to reduced exports of refined products and refinery shutdowns caused by conflicts involving Ukraine and Russia as well as attacks on Gulf refineries. The UK is particularly vulnerable due to a decline in domestic refining capacity, with only four operational refineries left since 2000. Diesel prices at the pump have already risen sharply for British drivers, reaching an average of £1.835 per litre. The situation has also impacted manufacturers and farmers reliant on red diesel. Goldman Sachs warned that further price increases are possible if conflicts persist or shipping costs remain high.
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