Goldman Sachs analysts noted that Brent crude prices have climbed to near $110 per barrel. This follows an attack on Saudi Arabia's key East-West pipeline, which handles 7 million barrels per day, last Thursday, and a postponement of talks between Iran and other Gulf states concerning shipping in the Strait of Hormuz.

The firm's estimates indicate that total recent Gulf oil exports have slightly rebounded to around 16-17 million barrels per day, roughly 70% of the pre-Iraq War level. However, this masks a more significant disruption. Using a 7-day moving average, exports stand at only about 13 million barrels per day, implying a net impact on Gulf exports of approximately 6.7 million barrels per day.

Goldman highlights that both the volume of oil affected and the duration of the disruption remain highly uncertain. An earlier attack on the East-West pipeline in April curtailed flows by 700,000 barrels per day, but only for four days. The recent assault could prove more severe and may threaten the remaining 2 million barrels per day of exports from the Yanbu terminal.

Saudi Arabia's crude exports fell by 2.8 million barrels per day month-on-month in August, with loadings at Yanbu dropping below the 2 million barrels per day mark. However, exports have recovered to June averages over the past two weeks, which analysts attribute to a rerouting of flows from Red Sea ports to eastern terminals. While Saudi Red Sea exports remain 3.3 million barrels per day below the June average, exports via Hormuz and other eastern ports have increased by the same amount since June.

The investment bank views the attack on oil infrastructure as a clear escalation of the conflict, raising the probability of its bullish price scenario. This scenario suggests that Brent could exceed $120 per barrel if average Gulf production by 2027 remains 4 million barrels per day below pre-conflict levels.

Recent estimates from the bank show Gulf crude production in August fell by 1.2 million barrels per day from July, bringing cumulative output losses to roughly 7.1 million barrels per day. The market may have shifted into a larger deficit in August, with external estimates and visible inventory drawdowns pointing to a supply-demand imbalance of around 3 million barrels per day, a figure higher than Goldman's own calculations.