Oil prices are expected to move lower in 2026 as rapid supply growth pushes the market deeper into surplus, according to Goldman Sachs. The bank said the dynamics seen in 2025 are likely to continue, with rising production outweighing geopolitical risks and limiting any sustained upside in prices.
Brent crude declined about 14% year on year in 2025, despite several sharp rallies triggered by geopolitical tensions. Goldman strategists believe a similar pattern will play out next year, with price spikes proving short-lived.
A team led by Daan Struyven forecasts Brent crude to average $56 per barrel and WTI to average $52 per barrel in 2026. These projections sit well below current forward curves of roughly $62 for Brent and $58 for WTI, reflecting what Goldman sees as an ongoing supply wave that will leave the market with a surplus of around 2.3 million barrels per day.
Rising global oil inventories reinforce this view. Strategists said rebalancing the market in 2026 will likely require lower prices, unless there are major supply disruptions or new production cuts from OPEC.
Goldman’s base-case outlook assumes no OPEC cuts next year. The bank argues that supply increases in 2025 were largely strategic and that recent price weakness is being driven by strong supply rather than a collapse in demand.
The bank expects oil prices to weaken further as 2026 progresses, with Brent and WTI bottoming near $54 and $50 per barrel, respectively, in the fourth quarter. Accelerating inventory builds at OECD commercial storage hubs are expected to add pressure, especially as onshore inventories become more influential for pricing while floating storage levels remain elevated.
Robust supply remains the central factor behind the bearish outlook. Goldman highlighted continued production surprises in the United States and Russia, along with slightly higher output from Venezuela, as forces weighing on longer-dated oil prices and reinforcing downward pressure across the futures curve.
In response, Goldman cut its three-year forward fair value estimate for Brent by $5 to $64 per barrel. The bank also lowered its average price forecasts for 2027 by the same amount, now expecting Brent and WTI to average $58 and $54, respectively, as excess supply delays market rebalancing.
While geopolitical risks remain elevated, Goldman views them as a source of volatility rather than a driver of a lasting rally. The bank noted that potential threats to sanctioned supply could trigger temporary price spikes, but policymakers’ preference for abundant energy supplies and relatively low oil prices is likely to cap gains, particularly ahead of U.S. midterm elections.
Overall, Goldman sees risks to its outlook as broadly balanced but tilted slightly to the downside. Beyond 2026, the bank expects oil prices to begin recovering from 2027 as non-OPEC supply growth slows and global demand remains resilient.
Even so, Goldman has trimmed its longer-term projections, lowering its Brent and WTI price estimates for 2030–2035 to $75 and $71 per barrel. The bank maintains that a gradual recovery in prices will still be needed over the long run to support investment after years of subdued spending on long-cycle projects.
