Goldman Sachs Warns of New Oil Price Equilibrium as Hormuz Risk Rises and US Shale Peaks

Goldman Sachs is signaling a major inflection point for global energy markets, driven by escalating geopolitical risk and structural supply constraints. Michele Della Vigna, the bank's head of EMEA natural resources research, warns that the Strait of Hormuz is becoming "more risky" while US shale production is "peaking." This combination, fueled by the US-Iran conflict, has created what he terms a "new oil-price equilibrium," fundamentally altering the investment calculus for the entire industry.

Della Vigna's analysis, delivered on Bloomberg Television, points directly to a prolonged period of industry underinvestment as the core problem. He states, "The industry has been underinvesting in hydrocarbons for too long." This chronic capital shortfall now collides with these new, persistent supply-side pressures. The result is a powerful driver for increased capital expenditure, with Goldman Sachs forecasting the highest energy capex since the shale revolution began.

The implications are profound for producers, national budgets, and consumer economies. The shift suggests sustained pressure on oil prices and a potential scramble to secure long-term supply chains. For energy companies and investors, the message is clear: the era of constrained investment is over, replaced by a new cycle where geopolitical premiums and the need to replace declining sources dictate spending. This recalibration places immense strategic and financial pressure on both public and private sector players across the energy landscape.