MW As nuclear talks restart in Geneva, Iran's 'oil on the water' reaches record levels

By Jules Rimmer

Goldman Sachs calculates there is $5 to $6 oil risk premium in the current oil price

To circumvent further possible sanctions, Iran has increased shipments of oil through the Straits of Hormuz in recent weeks

In advance of the third round of negotiations between the U.S. and Iran on Thursday, Iranian oil flows through the Straits of Hormuz chokepoint have spiked in the last fortnight and the amount loaded onto storage tankers or en route to market has hit record levels.

Iran oil on water continues to grow as imports fall short of exports

Goldman Sachs made these observations in a note published Thursday in which they calculate the risk premium baked into the current oil price is around $5-6. Nonetheless, Goldman believes geopolitical stress will ease over the course of the year and they still see Brent (BRN00) trading back around the $60 level in the fourth quarter.

Brent was trading just over $70.74 on Thursday, as the WTI grade (CL00) was above $65.

Tensions between the U.S. and Iran, with the Wall Street Journal reporting that a limited strike on Iran is contemplated by the White House, are sustaining the price of Brent in the seventies, say Goldman's analysts, headed up by Yulia Zhestkova Grigsby.

While President Donald Trump has reiterated a preference for a diplomatic solution to the standoff over Iran's nuclear capabilities, and Goldman notes Iranian officials have characterized a deal as "within reach," the WSJ article suggested a military operation of some sort and a negotiated compromise may not be mutually exclusive.

Goldman's note observes that the discounts offered by the sanctioned oil producers, Russia and Iran, on their crude have deepened as the quantities of oil on water rise and the pressure on the storage tankers rises.

Adding to the risk premium incorporated in the oil price are the intensified attacks by Ukraine on Russian production. Earlier this month, Goldman reports, Ukraine damaged the Druzhba pipeline delivering oil to Slovakia and Hungary, Russia's two most notable allies within the E.U., while another attack on a pumping station in Russia Monday has also reduced output. Goldman's analysts reckon Russian drilling activity fell 16% year over year in December.

-Jules Rimmer

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 26, 2026 04:11 ET (09:11 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.