Goldman Sachs has lowered its oil price forecasts, citing an expectation of a global oil surplus in 2027. The investment bank now projects Brent crude to average $75 a barrel in 2027, down from its previous forecast of $80 a barrel. For the fourth quarter of 2026, Goldman cut its Brent forecast to $80 a barrel from $90. Similarly, they have reduced their outlook for West Texas Intermediate (WTI) to average $75 a barrel in Q4 2026 and $70 a barrel in 2027.
The revised forecasts come even as Goldman acknowledges that global crude oil and product stockpiles were drawn down at a record pace in May, shrinking by 8.7 million barrels a day due to the conflict in the Middle East. However, the bank believes that the oil market will be well-supplied through 2027, with a large 3.2 million barrels per day surplus projected for that year. This anticipated surplus is driven by a faster-than-expected recovery in supply, particularly from the Middle East, following an interim deal that has helped normalize tanker traffic through the Strait of Hormuz.
The interim deal, announced by President Trump, is expected to allow Persian Gulf oil exports to return to pre-war levels by the end of July, a month earlier than previously forecast. While the agreement has reduced some geopolitical risk premium, Goldman still sees potential for price volatility. In a bullish scenario, Brent could rise above $130 in late 2026 and average $105 in 2027 if disruptions in the Strait of Hormuz persist. Conversely, a bearish scenario of faster export normalization, stronger supply growth, and weaker demand could see Brent average below $70 per barrel in Q4 2026 and below $60 per barrel in 2027. Despite the surplus, Goldman expects prices to remain relatively resilient due to strategic stockpiling by countries and a continuing geopolitical risk premium.
