Goldman Sachs Group Inc. (NYSE: GS) analyst Nikhil Bhandari stated in an interview with CNBC that oil flows out of the Strait of Hormuz and the Middle East have reportedly exceeded pre-war levels. Bhandari predicted that this movement could likely stabilize in the second half of 2027.
The analyst noted that refineries outside the Middle East and Russia would reach maximum stretch levels by March 2027. He added that refinery operations in the Middle East and Russia could take longer due to damage to infrastructure. Bhandari also cited dark fleet movement as a factor contributing to increased oil movement.
Regarding crude oil prices, Bhandari said that the full normalization of flows would result in oil stabilizing at around $80 per barrel. He emphasized that the crack spread—the profit refineries earn to convert crude oil into fuel—must stay much higher than the usual $20 spread despite the stabilization of oil flows.
Bhandari addressed the potential impact of export restrictions. He stated that a high probability event would be China restricting product exports, as domestic product inventories are heavily depleted locally within China. In the U.S. context, the analyst warned that restricting exports could impact gas prices at the pump. He noted that restrictions on the "one and a half million barrels" of exports per day would result in refinery run cuts and put upward pressure on gasoline prices.
