Oct 17 Reuters Goldman Sachs said on Tuesday it expects earnings for companies in the panEuropean STOXX 600 index to grow 3 in 2023, compared with its prior projection of no growth, on the back of higher oil prices.

Benchmark Brent crude futures have risen 6 since the conflict in the Middle East began earlier this month, and trade around 89 a barrel. Analysts at the brokerage expect Brent to end the year at 88 a barrel.

According to Goldman Sachs, higher oil prices will feed into higher revenues, benefiting commodityrelated sectors for which analysts at the brokerage expect positive earnings upgrades.

Shares of European oil majors BP, Shell and TotalEnergies have gained between 4.5 and 7 since the conflict began.

Europe39;s oil and gas sector hit nineyear highs on Monday, and leapt almost 7 since Oct. 6. The sector is up 8.3 so far this year, ahead of the STOXX 60039;s 6 gain during the period.

Adjusting for inflation, however, Goldman Sachs expects earnings in Europe to fall 2 this year. Cost of debt due to rising bond yields also poses a threat to profits, it said.

We estimate that a 100basispoint rise in the cost of debt would knock 3 percentage points off STOXX 60039;s EPS earnings per share, said Lilia Peytavin, portfolio strategist at Goldman Sachs.

For the next year, Goldman Sachs forecasts earnings growth of 7, versus 5 estimated previously, on anticipation of oil prices hitting 100 per barrel by end2024.

Through 2025, Goldman expects European and U.S….