Goldman Sees Geopolitics Haunting Oil Again With Unclear Effects
- Both sides of Iraq-Kurd clash have reason to sustain oil flows
- No immediate impact seen on Iran crude flows amid U.S. tension
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The oil market is grappling with intensifying geopolitical risks as uncertainty swirls over the impact of tensions surrounding nations such as Iraq, Iran and the U.S., according to Goldman Sachs Group Inc.
While Iraq’s government is clashing with Kurdish forces in the north of the OPEC nation, raising the prospect of output disruptions in the region, both sides have an incentive to keep oil flowing due to low production costs and “high revenue” available per barrel, according to the bank. And though the U.S. has hardened its stance against Iran, there’s still “high uncertainty” over whether it’ll reimpose sanctions curbing the Middle East country’s crude supply.