Goldman Sachs: Iranian war has a bigger impact on refined oil, prices rise significantly higher than crude oil

According to Goldman Sachs, the largest oil market disruption ever triggered by the Middle East war will have a greater impact on products such as aviation fuel and diesel than on crude oil. Analysts Yulia Zhestkova Grigsby and Daan Struyven pointed out in a report that "the price increases for many refined oil products far exceed those of crude oil." They stated that severe disruptions in the supply of medium and heavy crude oil could lead to a decrease in the production of diesel, aviation kerosene, and fuel oil. Since the outbreak at the end of last month, the US-Israeli war with Iran has plunged the global energy market into turmoil. This conflict has almost completely halted the export of oil and refined oil products from the Strait of Hormuz and has prompted attacks on the region's energy infrastructure. This has forced oil producers to significantly reduce production and suspend operations at some refineries. Since the first attack occurred, oil prices have surged by over 40%, with Brent crude prices surpassing $100 per barrel, and the prices of some products skyrocketing even more. In parts of Asia, fuel costs have even doubled, with South Korea following Thailand in restricting exports to protect the domestic market. Goldman Sachs analysts stated, "No product or region is immune." They pointed out that the war is weakening the ability of Persian Gulf oil-producing countries to export refined oil products, leading to refinery shutdowns, and significantly reducing the supply of crude oil best suited for producing diesel and other fuels. They stated, "Nearly 60% of typical crude oil exports from the Persian Gulf are medium and heavy crude oil (typically used for producing aviation fuel, diesel, and fuel oil), while alternative producers outside the Middle East are much fewer." Goldman Sachs stated that the global chaos caused by this conflict will also impact naphtha (a refining by-product used to manufacture petrochemical products, which is a key input for some manufacturers) and aviation fuel. The bank stated that nearly 50% of Asia's naphtha imports come from the Persian Gulf, while 40% of Europe's aviation fuel relies on that region.