California and Texas jobbers watch crude cost risk climb as Goldman warns oil could hit $120 on shipping threats
Goldman Sachs says oil could reach $120 a barrel if shipping risks keep rising, and that number is the one that lands on your rack this month. Nothing has moved that far yet. But the warning is tied to real disruption at the Strait of Hormuz, and a $120 barrel would push wholesale gasoline and diesel up hard from where they are now.
The Hormuz signal
Six empty LNG carriers are heading toward Qatar, all with links to Iran, sitting in the Gulf of Oman or approaching it, per ship-tracking data from Kpler that Bloomberg reported. Another tanker crossed the Strait of Hormuz and is running for the Qatari coast. QatarEnergy looks set to restart loadings, and it already pushed one cargo through the strait. For a US jobber this is not an LNG story. It is a Hormuz-is-moving-again story, and Hormuz is the choke point behind Goldman's $120 case. Crude cost could ease if loadings resume cleanly and the strait stays open.
The diesel squeeze
Refiners are running the barrel toward diesel and starving fuel oil to do it. The shipping fuel shortage is pegged at 218,000 barrels a day this quarter, according to Energy Aspects by way of Reuters, the first quarterly bunker shortage since 2025. Back then it was 6,000 barrels a day, so this is a much bigger gap. Asia takes the worst of it.
For US wholesale the read-across is on distillate. When refiners chase diesel margins, diesel supply stays favored at the rack, but it also tells you distillate is tight enough that they are giving up other products to make it. Watch your diesel differentials and your allocation notices. A tight distillate market is where branded and unbranded spreads widen and where allocation letters start showing up first.
The Texas gas plant
South Korea agreed to put $22.3 billion into a 6.3 GW gas-fired power plant in Texas to feed data centers, Reuters reported citing Korean media, its first investment under the Trump trade deal. Seoul has pledged some $350 billion into the US in exchange for better tariff terms. This is a gas-demand and power story, not a rack story, but 6.3 GW of new gas draw in Texas is worth filing for anyone selling in that market.
What to watch
Whether Qatari loadings actually restart and the strait keeps running without new disruption, which could take the air out of Goldman's $120 call. Whether the distillate pull tightens diesel enough to trigger allocation at your terminals. And how fast crude reprices if the Hormuz traffic reverses either way.