Introduction#

Goldman Sachs has recently updated its oil price forecasts, attributing the changes to a slower recovery in crude oil exports from the Persian Gulf. This follows disruptions in oil flows through the crucial Strait of Hormuz.

Revised Price Predictions#

The bank now anticipates that Brent crude will average $90 per barrel in the fourth quarter of 2026, an increase from its previous estimate of $80. Similarly, the forecast for West Texas Intermediate (WTI) crude has been raised from $75 to $83. Predictions for 2027 have also been adjusted, with Brent expected to average $85 and WTI at $80.

Supply and Demand Dynamics#

Goldman's analysts note that the recovery of Gulf crude exports is now expected to be delayed until the end of June, compared to an earlier estimate of mid-May. They estimate that production losses in the Persian Gulf are causing global oil inventories to decline at a record pace of 11-12 million barrels per day in April. This shift has transformed the market from a surplus of 1.8 million barrels per day in 2025 to a significant deficit of 9.6 million barrels per day in the second quarter of 2026.

Global Market Implications#

Global oil demand is projected to decrease by 1.7 million barrels per day year-on-year in the second quarter, influenced by rising refined product prices and some rationing. The most significant demand reductions are expected in the Middle East, South Korea, Japan, and price-sensitive regions in Africa. Meanwhile, supply growth outside the Gulf is anticipated to be modest, with a forecasted increase of just 1 million barrels per day from countries like Russia, the United States, and Kazakhstan.

Potential Risks and Scenarios#

Goldman Sachs highlights that risks to its forecasts are skewed to the upside. In a less favorable scenario, where Gulf exports normalize only by the end of July, Brent prices could average over $100 in the fourth quarter. Conversely, if conditions worsen, prices could approach $120. Even in a more optimistic scenario, with a mid-June normalization, prices are expected to remain just below $80. The analysts also warn that global visible oil inventories could reach their lowest levels since 2018, potentially leading to sharp price increases if stocks fall critically low.