Gulf Crude Output Down 57% as Goldman Warns of 12-Month Volatility Window
Goldman Sachs analysis reveals 14.5 million barrels per day offline in April, triggering physical crude panic at $150/bbl while futures markets lag—institutional positioning suggests repricing shock if Strait closure extends.
Goldman Sachs estimates that 14.5 million barrels per day of Persian Gulf crude output sat offline in April, equivalent to 57% of pre-war supply, as the Strait of Hormuz closure and Iran-linked maritime disruptions trigger what the International Energy Agency calls the largest supply disruption in oil market history.
The shortfall cascades across three domains: Energy markets facing sustained crude volatility and refining margin compression, a macro outlook shadowed by Inflation persistence and stagflation risk, and geopolitical fragility anchored to ceasefire durability and maritime escalation vectors. Goldman’s positioning analysis suggests institutional consensus on a 12-month volatility window, with physical crude pricing at $150 per barrel—far above futures markets—signaling a disconnect that may force a repricing shock if the Strait remains closed beyond Q2.
14.5 mb/d
−57%
0.3 mb/d
10.9 mb/d
$150/bbl
Physical Markets Signal Institutional Panic
Physical crude benchmarks have decoupled sharply from futures, with North Sea Dated crude trading around $130 per barrel—$60 above pre-conflict levels—as refiners scramble to replace Middle Eastern cargoes. The IEA reports middle distillate prices in Singapore reaching all-time highs above $290 per barrel, while U.S. Energy Information Administration data shows distillate crack spreads at New York Harbor averaged $1.42 per gallon in March—the highest monthly level since 2022 and more than double the 2021–25 average of 68 cents.
Persian Gulf exports, even with pipeline workarounds, are running at 9.3 million barrels per day, roughly 40% of normal flows, according to Goldman’s analysis. Iranian exports have effectively collapsed from their pre-blockade run rate to just 0.3 million barrels per day since the April 12 U.S. blockade announcement. Global visible stocks are drawing at 6.3 million barrels per day in April, but once non-OECD refined storage is factored in, total draws approach 10.9 million barrels per day—the steepest monthly pull since 2017.
“The longer this drags, the more that optimism turns into a positioning trap.”
— Goldman Sachs analyst commentary
The disconnect between physical urgency and futures complacency reflects a market assumption that the Strait will reopen by mid-year. Available empty tanker capacity in the Gulf has fallen by around 130 million barrels, or 50%, limiting how quickly exports can resume even after reopening, per Goldman’s April 24 research. The shutdowns have been largely precautionary—driven by stock management and Strait closure rather than physical damage to oilfield infrastructure—but the logistical bottleneck suggests a slower recovery than futures pricing implies.
Inflation Transmission and Stagflation Risk
The supply shock is already transmitting through to broader inflation metrics. Goldman Sachs now places the risk of a downturn over the next 12 months at 30%, driven by the surge in oil prices. Several analysts see inflation running closer to 3% this year rather than the 2% central banks had targeted, eroding disposable incomes and weighing on job creation.
The IEA calculates cumulative supply losses exceeded 360 million barrels in March and projects 440 million barrels for April. The overall loss in oil exports exceeds 13 million barrels per day, with associated production curtailment and damage to energy infrastructure in the region. The crisis has been described as the largest disruption to energy supply since the 1970s oil crises.
Retail gasoline prices in the U.S. have climbed to $3.99 per gallon, while diesel hit $5.40, according to EIA data. Brent crude’s Q1 trajectory—from $61 to $118 per barrel—represents the largest inflation-adjusted quarterly increase since 1988. The conflict has echoed the 1970s energy crisis through acute supply shortages, currency volatility, and heightened risks of stagflation and recession.
Ceasefire Fragility and Maritime Escalation
The geopolitical dimension centers on ceasefire durability and the risk of maritime incidents reigniting conflict. The International Maritime Organization reported on April 21 that about 20,000 mariners and 2,000 ships remain stranded in the Persian Gulf because of the closure. The Iranian Revolutionary Guard Corps announced the Strait has been closed to any vessel going “to and from” the ports of the U.S., Israel, and their allies.
Alternative routes have absorbed some volume—the IEA reports 7.2 million barrels per day flowing through bypass pipelines—but infrastructure remains vulnerable. Saudi Arabia’s East-West pipeline capacity was cut by 700,000 barrels per day in April following an attack, while a drone strike on Fujairah exposed the fragility of Gulf state alternatives. CNBC reports a “huge trust gap” among Gulf states regarding long-term security, even as the war accelerates investment in bypass infrastructure.
What to Watch
The market’s repricing risk hinges on three variables: the duration of the Strait closure beyond Q2, the speed at which tanker capacity can be reconstituted once shipping resumes, and the stability of alternative pipeline routes under ongoing proxy conflict. Goldman CEO David Solomon projected on April 21 that crude prices are likely to reach $80 to $100 per barrel over the next three to six months, but cautioned that should tensions intensify dramatically, barrel prices could skyrocket to $170.
- Physical crude at $150/bbl signals institutional panic that futures markets have yet to price, creating repricing vulnerability if Strait closure extends.
- 10.9 mb/d global inventory draw—steepest since 2017—depletes buffers that would cushion extended disruption.
- Tanker capacity constraint (50% reduction in available Gulf vessels) will slow recovery even after ceasefire, limiting rebound velocity.
- Inflation persistence risk now embedded in 2026 forecasts, with Goldman placing 12-month recession probability at 30%.
- Alternative pipeline infrastructure remains vulnerable to proxy attacks, as evidenced by Saudi East-West and Fujairah incidents.
Monitor ceasefire durability indicators—particularly maritime incidents in the Arabian Gulf and attacks on bypass infrastructure—as leading signals for whether the 12-month volatility window compresses or extends. The physical-futures disconnect suggests the market is pricing a best-case scenario; any deviation will force rapid adjustment in institutional positioning.