Goldman Sachs: The disruption of energy flows in the Red Sea will not greatly affect oil prices

Goldman Sachs said the disruption to energy flows in the Red Sea would likely not have a major impact on crude oil and liquefied natural gas prices, as opportunities to reroute ships meant production should not be directly affected.

Oil prices rose on Tuesday, continuing the gains they achieved in the previous session, as attacks launched by the Iran-aligned Houthis in Yemen on ships in the Red Sea disrupted maritime trade and forced companies to change the course of ships.

Major oil company BP temporarily suspended all trips through the Red Sea, and oil tanker group Front Line said on Monday that its ships would avoid crossing the waterway, indicating that the crisis is expanding to include energy shipments.

“We estimate that a hypothetical long-term redirection of all total oil flows of seven million barrels per day (north and south) will raise spot crude oil prices compared to long-term prices by three to four dollars per barrel,” the investment bank said in a note dated yesterday, Monday.