Goldman Sachs has reduced its Brent crude oil price forecast for the fourth quarter of 2026 to $80 per barrel, a decrease from its previous estimate of $90. This adjustment is attributed to an anticipated quicker recovery in Middle East oil supply following a deal to reopen the Strait of Hormuz.
The investment bank now expects Persian Gulf oil exports to return to pre-war levels by the end of July, one month earlier than its prior projection of the end of August. This accelerated timeline is a key factor in the revised outlook. Goldman Sachs also lowered its average Brent forecast for 2027 to $75 per barrel from $80 previously, and its West Texas Intermediate (WTI) forecast to $75 for Q4 2026 and $70 for 2027.
The reopening of the Strait of Hormuz, facilitated by an interim agreement announced by US President Donald Trump, is seen as easing supply fears. The report suggests that additional supply could come from producers like Saudi Arabia and the United Arab Emirates increasing their output, and potentially from the easing of sanctions on Iranian oil.
Despite forecasting a significant global oil surplus of 3.2 million barrels per day in 2027, Goldman Sachs anticipates crude prices will remain relatively resilient. This resilience is expected due to strategic stockpiling by various countries and a continuing geopolitical risk premium.
However, Goldman Sachs cautioned that risks to the supply recovery persist, including renewed hostilities in the region, attacks on shipping, or disruptions to negotiations, which could delay normalization. The bank also outlined a bullish scenario where Brent could exceed $130 in late 2026 and average $105 in 2027 if disruptions in the Strait of Hormuz continue, and a downside scenario where Brent could fall below $70 in Q4 2026 and below $60 in 2027 due to faster export normalization, stronger supply growth, and weaker demand.
