Goldman Sachs holds $80 Brent forecast, warns of $120 risk

Goldman Sachs The Goldman Sachs Group, Inc. ↘ 0.01% is holding firm on its $80-per-barrel Brent crude forecast for the fourth quarter of 2026, balancing expectations that a US-Iran diplomatic framework will restore Persian Gulf oil flows against the possibility that the Strait of Hormuz remains a contested waterway through year-end.

Base Case Hinges on De-escalation

The bank's outlook, reiterated this week, assumes that exports from the Persian Gulf will normalize to pre-war levels by the end of July — roughly one month earlier than Goldman had previously expected — following an interim agreement between Washington and Tehran announced in June. Under this scenario, lower Middle East supply during the first half of the year should support prices even as flows resume, keeping Brent near $80 in the fourth quarter.linkedin+3

For 2027, Goldman Sachs projects Brent will average $75 per barrel and West Texas Intermediate $70, despite an anticipated surplus of 3.2 million barrels per day. The bank argues that depleted inventories and strategic stockpiling exceeding one million barrels per day will prevent prices from collapsing under the weight of excess supply.investing+2

Upside and Downside Scenarios

If the Strait of Hormuz remains disrupted into 2027, Goldman sees Brent surging past $120 by late 2026 and averaging $105 next year. The bank's analysts have described the Hormuz disruption as the largest oil supply shock in history, with roughly 14 percent of global production from the Middle East taken offline at its peak.tradingkey+2

On the downside, Goldman flagged stronger-than-expected OPEC+ output, with June production running above quotas, alongside weaker demand from China, South Korea, and the Middle East. In a bearish scenario combining an earlier export recovery with stickier demand losses, Brent could average below $70 in late 2026 and under $60 in 2027.investing+2

Market Context

The forecast reflects Goldman's second major downward revision since early 2026, when the bank had Brent at $90 for the fourth quarter following the initial Hormuz shock in March. The June cut of $10 per barrel came after President Trump announced the interim deal with Iran. Physical market indicators remain tight — U.S. crude inventories at the Cushing, Oklahoma hub have hovered near operational minimums, and refinery utilization sits above 96 percent — suggesting that any breakdown in diplomacy could rapidly reprice crude higher.wsj+3