Goldman Sachs Raises Oil Price Outlook
Goldman Sachs has increased its oil price forecasts, pointing to a slower-than-anticipated recovery in crude exports from the Persian Gulf after disruptions in flows through the Strait of Hormuz.
The bank now expects Brent crude to average $90 per barrel in the fourth quarter of 2026, up from its previous estimate of $80. Its forecast for WTI has also been raised to $83 from $75. Looking further ahead, projections for 2027 have been revised higher to $85 for Brent and $80 for WTI.
Current Oil Market Prices
As of early Monday trading, Brent and WTI futures were priced at $107.60 and $96.24 respectively, reflecting continued tightness in global supply conditions.
Delayed Recovery in Gulf Oil Exports
Goldman’s upgraded outlook is based on the expectation that exports from the Gulf region will not fully recover until the end of June. This marks a delay compared to the bank’s earlier projection of mid-May normalization and is accompanied by a slower-than-expected rebound in production levels.
According to analysts led by Daan Struyven, approximately 14.5 million barrels per day of lost Persian Gulf production has significantly impacted global oil inventories. These disruptions are currently driving record inventory drawdowns of 11–12 million barrels per day.
From Surplus to Record Deficit
The oil market has undergone a dramatic shift. What was once a surplus of 1.8 million barrels per day in 2025 has turned into a projected deficit of 9.6 million barrels per day in the second quarter of 2026.
At the same time, commercial oil inventories across OECD countries are declining at a pace of 2.2 million barrels per day, further tightening supply conditions.
Weakening Global Oil Demand
Despite supply constraints, global oil demand is expected to fall by 1.7 million barrels per day year-on-year in the second quarter. This decline is largely attributed to rising refined product prices and some degree of consumption rationing.
The most significant demand reductions are anticipated in the Middle East, South Korea, Japan, and several price-sensitive markets across Africa.
Limited Supply Growth Outside the Gulf
Oil supply growth outside the Gulf region remains modest. Goldman forecasts a combined increase of just 1 million barrels per day from major producers such as Russia, United States, and Kazakhstan.
In particular, U.S. production growth has been constrained by disciplined capital spending in the shale sector, lower inventories of drilled-but-uncompleted wells, and market expectations that disruptions in the Strait of Hormuz will eventually prove temporary.
Upside Risks to Oil Prices
Goldman Sachs highlights that risks to its base-case scenario are skewed to the upside. In a more negative scenario where Gulf exports only normalize by the end of July, Brent crude could average just above $100 per barrel in the fourth quarter.
A more severe scenario — involving delayed normalization and permanent production losses of 2.5 million barrels per day — could push Brent prices close to $120.
Downside Scenario Remains Limited
On the other hand, a more optimistic scenario would see exports normalize by mid-June with no lasting damage to production capacity. Even in this case, oil prices are expected to remain relatively elevated, falling only slightly below $80 per barrel.
Oil Inventories at Critical Levels
Strategists also warned that global visible oil inventories are on track to reach their lowest levels since at least 2018, even under favorable conditions. This raises the possibility of sharp and unpredictable price increases if stock levels fall to critically low thresholds.
Additionally, potential U.S. restrictions on oil exports—while not part of Goldman’s base forecast—were identified as a significant tail risk that could further disrupt global markets.
