Goldman Sachs Lowers Oil Price Forecasts for Q2 2026
Goldman Sachs has reduced its second-quarter 2026 oil price forecasts, following easing geopolitical tensions in the Middle East. The bank now expects Brent crude to average $90 per barrel and U.S. crude (WTI) to reach $87 per barrel.
This marks a notable downgrade from its previous estimates of $99 for Brent and $91 for WTI.
Ceasefire Eases Risk Premium in Oil Markets
According to Goldman Sachs, the revision reflects a decline in the geopolitical risk premium, particularly at the front end of the oil curve. The agreement on a two-week ceasefire between the United States and Iran has contributed to improving supply expectations.
The bank also noted a gradual increase in oil flows through the Strait of Hormuz, a key global energy chokepoint, further supporting the downward adjustment.
Oil Prices Drop but Uncertainty Remains
Brent crude prices have already fallen by more than 11% this week, driven by optimism that the Strait of Hormuz could fully reopen after U.S. President Donald Trump agreed to the temporary ceasefire with Iran.
However, oil prices rebounded slightly on Thursday, as concerns persist over whether the ceasefire will hold. Market participants remain cautious, given the possibility that supply disruptions in the Middle East could continue.
Goldman Sachs Maintains Q3 and Q4 Outlook
Despite lowering its second-quarter forecasts, Goldman Sachs left its outlook for the rest of 2026 unchanged. The bank continues to project:
- Brent crude at $82 in the third quarter and $80 in the fourth quarter
- WTI crude at $77 in the third quarter and $75 in the fourth quarter
This suggests a broader expectation of stabilizing oil markets later in the year.
Upside Risks Still Dominate Oil Market Outlook
Goldman Sachs emphasized that risks to its oil price forecasts remain tilted to the upside. Potential factors include prolonged geopolitical tensions and sustained production losses in key oil-producing regions.
In a worst-case scenario, where the ceasefire collapses and Middle East output declines by approximately 2 million barrels per day, Brent crude prices could rise significantly—potentially averaging close to $115 per barrel in the fourth quarter.
European Gas Forecasts Also Revised Lower
In addition to oil, Goldman Sachs also lowered its second-quarter forecast for European natural gas prices. The benchmark TTF gas price is now expected to average €50 per megawatt-hour, down from the previous estimate of €70.
This adjustment is based on expectations that liquefied natural gas (LNG) flows through the Strait of Hormuz will gradually normalize starting mid-April.
Gas Price Risks Remain Elevated
Despite the downward revision, Goldman Sachs warned that risks to gas prices remain significant. If LNG flows are delayed or key infrastructure is damaged, European gas prices could surge above €75 per megawatt-hour.
