Goldman Sachs: Goldman Sachs raises oil price forecasts: Supply disruption risks lift premium, but prices still expected to fall in 2027

How much did Goldman Sachs raise its oil price forecasts?

Goldman Sachs raised its Brent crude forecast for December 2026 from $90 to $105 per barrel and its WTI forecast from $81 to $94. It raised its respective average price forecasts for 2027 from $80 and $73 to $88 and $78.
The increase has two reasons: near-term downside supply risks could keep the risk premium high, while the medium-term global supply forecast now includes an allowance for disruptions.

Goldman Sachs estimates that Brent spot futures prices rose to $118 per barrel in October, with a risk premium of about $27 explaining most of the increase. Over the same period, its estimated fair value remained broadly in the $90-plus range per barrel, based mainly on broadly stable global inventories.
Under Goldman Sachs's model, this premium is equivalent to the market pricing in a month-on-month decline in Middle East production of 5 million barrels per day for six months. Both precautionary purchases by refiners and portfolio hedging by investors are supporting the premium.
The bank expects the risk of geopolitical escalation, the difficulty of a diplomatic breakthrough and the historical duration of supply shocks to keep the premium relatively high over the coming months. Its model assumes the premium falls from $16 per barrel in the fourth quarter of 2026 to $7 in the second quarter of 2027.

Goldman Sachs estimates that global liquid fuels supply and demand were broadly balanced from September to October, compared with a shortfall of 7.3 million barrels per day in March. Relative to the 2025 average, the impact of a 4.4 million-barrel-per-day decline in Gulf production was roughly offset by the 2025 supply surplus of 1.1 million barrels per day, an increase in non-Gulf production of 2.1 million barrels per day and a decline in global demand of 1.3 million barrels per day.
On a 14-day moving average, Goldman Sachs estimates that crude exports from Gulf exporters and globally both reached or exceeded their 2025 averages in recent weeks. This estimate includes an allowance for hidden exports, but exports have declined in recent days.

Goldman Sachs added an allowance for global supply disruptions of 1 million barrels per day to its 2027 baseline scenario, putting its global production forecast below the sum of its country-level baseline forecasts. The allowance mainly covers potentially larger disruptions in the Gulf region and also accounts for risks in Russia, Kazakhstan and parts of Africa.
The allowance is higher than the bank's measured historical median for unexpected supply shocks of 700 thousand barrels per day. Meanwhile, Goldman Sachs's country-level baselines still assume that Gulf production outside Iran returns to its 2025 average in the first quarter of 2027.
Goldman Sachs expects supply to return to surplus and inventories to rise in 2027, with fair value falling as a result and the risk premium gradually narrowing. Consequently, despite the upward revision, its baseline oil price remains slightly below forward prices.

Goldman Sachs believes oil price risks are more balanced than before following the forecast increase, but remain tilted overall to the upside. If average Gulf production in 2027 is 3.5 million barrels per day below its 2025 level, Brent could reach $140 per barrel and average about $130 for the year. The baseline scenario assumes Gulf production is 1.1 million barrels per day above its 2025 level.
If average Gulf production in 2027 is 2.5 million barrels per day above its 2025 level and the global supply disruptions allowed for do not occur, Brent could fall to the $60-plus range per barrel. A faster recovery in Middle East production or a faster decline in the risk premium are the main triggers for the downside scenario.