Goldman Sachs: Iran War Pushes Up Oil Prices But Global Supply Chain Remains Stable, Limited Inflation Impact

Gate News Report, March 16 — Goldman Sachs analysts stated that although the Iran war has caused oil prices to surge, the global supply chain has not experienced widespread disruptions, and the overall economic impact remains manageable. Since the US and Israel launched joint strikes against Iran, Brent crude futures have risen to about $105 per barrel, and US West Texas Intermediate futures are around $99.50, with gains of over 70% this year.

Goldman economists noted that this round of oil price shocks mainly affect the energy sector, which is quite different from the global supply chain disruptions caused by the pandemic and energy crises in 2021 and 2022. They expect that the oil price increase could reduce global GDP by approximately 0.3% over the next year, with overall inflation rising by about 0.5 to 0.6 percentage points. Global economic growth in the fourth quarter may slow from the pre-war forecast of 2.9% to 2.6%, while overall inflation remains around 2.9%.

Analysis suggests that limited exposure to non-energy trade is a key reason why the supply chain has not been severely impacted. Global non-energy trade with the Gulf region accounts for only about 1%, far below the over 20% trade share during the pandemic affecting China and East Asia. Even in industries with high export shares of chemicals, metals, and other commodities, critical inputs like sulfur, nitrogen, ammonia, and helium are backed by existing inventories and long-term contracts, limiting the risk of supply disruptions. The only potential concern is methanol, which accounts for nearly one-fifth of the world’s capacity and is used in acetic acid production, potentially causing downstream fluctuations in adhesives, solvents, and paints.

Additionally, Goldman noted that since the outbreak of war, shipping data shows a slight decline in non-tanker maritime transportation costs, and the rise in air freight costs is expected to have a limited impact of less than 5 basis points on global inflation. This indicates that although energy price fluctuations may trigger some cost pressures, overall trade flows remain relatively stable. Analysts believe that the global economy and supply chains continue to demonstrate resilience amid current geopolitical shocks, and investors need not overly worry about widespread supply chain disruptions. (Business Insider)