Speaking on the Goldman Sachs Exchanges podcast on March 2, Struyven broke down the math behind the market’s reaction. Without sustained supply disruptions, Goldman Sachs estimates the fair value for Brent crude oil to be around $65 per barrel. “With the market price at $78, the market is essentially pricing an $13 per barrel risk premium,” Struyven explained. According to the firm’s models, this $13 premium perfectly aligns with the expected price impact of a 100% full closure of the Strait of Hormuz lasting for roughly one month.
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