PremiumWhere Demand Destruction Is Greatest
Brent crude prices dropped as low as $97 following Trump’s recent remarks about potential discussions between the US and Iran and prospects of a deal in the near future, coupled with a report of a potential month-long ceasefire. Iran’s officials denied any talks with the US, while Israel confirmed indirect communications between the US and Iran.
On the negative side for oil prices:
- The US and regional mediators reportedly discussed holding high-level peace talks with Iran as soon as Thursday, with Tehran yet to confirm.
- The US reportedly sent Iran a 15-point plan to end the war, addressing Iran’s ballistic missiles and nuclear programs and discussing maritime routes.
- President Trump said “this war has been won” and “I think we’re going to end it”.
On the positive side for oil prices:
- Iran and Israel reportedly continued strikes.
- The US reportedly plans to deploy about 3,000 airborne troops.
- Several Gulf states reportedly edge toward joining operations against Iran.
In the meantime, flows through the Strait of Hormuz remain very limited, down 95% vs normal with only 2 oil tankers passing daily on average over the last several days (although that number is now growing) while US officials confirm that Iranian mines are still situated in the Strait.
Hormuz traffic sends mixed signals
— MarineTraffic (@MarineTraffic) March 24, 2026
Iran appears to be pursuing a calibrated strategy in the Strait of Hormuz, using selective vessel passage as strategic signalling rather than imposing full disruption. According to #MarineTraffic data, some activity may be resuming, with nine… pic.twitter.com/fKjlPhdHYx
While Goldman now think that oil flows through the Strait of Hormuz will remain disrupted through April 10th, the market reaction likely reflects some retreat in the perceived risks of lengthy disruptions and of damage to energy assets.
In any case, oil flows through the Persian Gulf remain very low. The estimated total hit to oil flows from thenPersian Gulf after accounting for pipeline redirection increased to 17.7mb/d (4-day moving average) with oil flows through the Strait 98% below normal levels (at 0.4mb/d) and net pipeline redirection via the Yanbu and Fujairah ports stands at 1.9mb/d (4-day moving average).
Meanwhile, oil floating storage from the Persian Gulf has increased by 74mb since Feb 27th, close to the estimated tanker capacity on Feb 27th, suggesting Gulf producers may be approaching on water storage constraints.
The good news is that attacks on energy assets in the Middle East subsided over the last two days: while the IEA estimates that at least 40 energy assets have been severely damaged since the beginning of the war, physical damages to oil assets have been mostly concentrated in refineries rather than crude production facilities, where shut-ins continue to be mostly precautionary. Friday’s attacks on Kuwait Mina Al-Ahmadi refinery lifted Goldman's estimate of Middle East refining outages to 2.3mb/d.
Still as we discussed last week, the cumulative effect of the supply-chain shock means that demand destruction has arrived, as very high refined products prices started to weigh on oil demand, especially for jet fuel and diesel.
As a result, several airlines announced flights cuts on rising fuel costs while some Asian policymakers pushed for broader work-from-home adoption to ration road oil fuel. At the same time, several Asian and European countries have already implemented export bans on certain oil products (e.g. China on gasoline, jet fuel and diesel), while others introduced price caps to shield consumers from surging wholesale prices (e.g. South Korea on gasoline and diesel).
The table below summarizes where demand destruction is the most acute.
As detailed previously, this is just the start: unless the full supply-chain is not restored in the coming days (not weeks), demand destruction will spread rapidly from Asia, toward Europe, and eventually the rest of the world.
More in the Goldman Oil Tracker note available to pro subs.
