Goldman Sachs on Oil - FJElite

Markets bouncing to start the week. No real progress in Iran, I'm not sure I've seen much of anything negative for oil over the weekend but appears there was already a lot in the price. WTI seems to curiously struggle above $100. Market’s sensitivity to the oil price appears to be diminishing... it now takes larger shocks to trigger equity sell offs. Importantly, flows from Kharg Island do not appear to have been materially disrupted despite US attacks. Betting markets seem to assign low and declining odds of a ceasefire by the end of April (around 35%)...I get the impression equities are calibrated for something much sooner. This conflict involves at least three major actors, and one key variable will be whether Iran allows the U.S. a political exit or continues to apply soft pressure via Strait of Hormuz, even if ceasefire discussions begin. Note the playbook from Russian invasion of Ukraine... multiple ceasefire headlines rallied markets aggressively but ultimately went nowhere. That will likely be the first major catalyst here as well... ceasefire discussions announced via intermediaries. We're not at a ceasefire yet but just remember the pattern: t+1 after that headline tends to be a good opportunity to sell into risk.