Goldman Sachs Cuts Oil Price Forecasts After Hormuz Deal
Goldman Sachs has lowered its oil price forecasts following President Donald Trump’s announcement of an interim agreement to reopen the Strait of Hormuz.
The deal is expected to lift the U.S. blockade after a scheduled signing on Friday. Goldman now assumes that Persian Gulf oil exports will return to pre-war levels by the end of July.
The bank had previously expected exports to normalize by the end of August.
Goldman Lowers Brent and WTI Forecasts
Goldman reduced its Brent crude forecast for the fourth quarter of 2026 to $80 per barrel, down from its previous estimate of $90.
The bank also cut its average Brent forecast for 2027 from $80 to $75 per barrel.
West Texas Intermediate crude is now expected to average $75 per barrel during the fourth quarter of 2026. Goldman forecasts an average WTI price of $70 in 2027.
According to the bank, bringing the expected supply recovery forward by one month reduces the estimated fair value of oil by around $10 per barrel in late 2026 and $5 per barrel in 2027.
Persian Gulf Oil Flows Begin to Recover
Goldman strategists, including Daan Struyven, said risks surrounding the supply recovery remain balanced in both directions.
On the positive side, Persian Gulf oil flows have already increased to an estimated 11 million barrels per day.
The bank said restoring exports to pre-war levels would require Hormuz flows to rise by another 12 million barrels per day. That would bring traffic through the strait to around 70% of its previous level.
Saudi Arabia and the United Arab Emirates could also increase production more aggressively in response to low commercial oil inventories across OECD countries.
Iranian output may rise further if the country receives sanctions relief under a broader agreement.
Security Risks Could Delay Hormuz Recovery
Several risks could prevent oil exports from recovering as quickly as Goldman expects.
Renewed regional fighting or attacks on tankers could make shipping companies reluctant to use the Strait of Hormuz. Clearing naval mines from major shipping routes may also require significant time.
Iran could attempt to close the waterway again if wider negotiations over its nuclear program fail.
These risks mean that the reopening of Hormuz may not immediately restore normal shipping and energy flows.
Goldman Expects Oil Prices to Remain Supported
Goldman forecasts an oil supply surplus of approximately 3.2 million barrels per day in 2027.
Despite the expected surplus, the bank believes Brent and WTI will remain close to their long-term fair values of $75 and $70 per barrel, respectively.
Goldman cited limited capacity for additional commercial stockpiling after major inventory declines during the first half of the year.
The bank also expects strategic oil purchases to exceed 1 million barrels per day in 2027.
In addition, continued geopolitical uncertainty could preserve a security premium in oil prices and prevent a deeper decline.
Brent Could Exceed $130 if Hormuz Disruptions Continue
Goldman said the overall risks to its oil price forecasts remain tilted toward the upside.
Under a bullish scenario in which disruptions in the Strait of Hormuz continue throughout 2027, Brent crude could climb above $130 per barrel in late 2026.
The bank said Brent could then average approximately $105 per barrel during 2027.
Faster Export Recovery Could Push Oil Below $60
Goldman also outlined a more bearish scenario for the oil market.
An earlier-than-expected recovery in Persian Gulf exports, weaker demand and stronger global supply could place additional pressure on prices.
Under that scenario, Brent could average slightly below $70 per barrel in the fourth quarter of 2026.
The benchmark could then fall below an average of $60 per barrel in 2027.
