Goldman Sachs Research expects global crude oil prices to moderate significantly in 2027, with Brent crude forecast to average $80 per barrel after trading at $90 per barrel in December 2026. According to Daan Struyven, co-head of global commodities research and head of oil research at Goldman Sachs, this represents a revision from the firm's previous forecast of $85 per barrel for 2026. The bank's outlook is based on the expectation that the oil market will move into a surplus in the fourth quarter of 2026 and remain in surplus throughout 2027. As per ANI, the firm expects benchmark Brent crude to trade at $90 per barrel in December 2026 before averaging $80 per barrel in 2027, with the recovery in Middle Eastern oil exports and higher production outside the Persian Gulf playing crucial roles in the market balance. Struyven predicts that "we maintain our base case that continued adaptation of Middle East supply will eventually reduce crude oil prices, while potential renewed escalation still poses significant net upside risk."
The recovery in West Asian oil exports and higher production outside the Persian Gulf have significantly narrowed the global supply deficit, as reported by Goldman Sachs. The market was nearly balanced in September, with demand exceeding supply by just 0.3 million barrels per day (mb/d), compared with a deficit of 7.2 mb/d in March. Goldman Sachs estimates that Persian Gulf oil exports had recovered to around their 2025 average by late September, with the recovery including an estimated four million barrels per day (mb/d) of "dark" exports—shipments on tankers that keep their transponders turned off to hide their movements. This supply recovery is a key factor supporting the firm's outlook for lower prices in 2027, with the recovery in Middle Eastern oil exports and higher production outside the Persian Gulf playing crucial roles in the market balance. The shock to oil flows through the Strait of Hormuz is expected to continue weighing on global oil demand, bringing the market nearer to balance.
Despite the forecast for lower prices, current market conditions show significant elevation in crude prices. According to Goldman Sachs, physical Brent crude prices for near-term delivery have exceeded $130 per barrel, while benchmark Brent futures have recently traded above $100. The firm estimates that crude prices currently include a risk premium of nearly $25 per barrel, reflecting the possibility of further supply disruptions and additional inventory drawdowns if the conflict escalates. As per ANI, physical prices remain elevated because escalation threatens supply while near-record-low global inventories fuel strong restocking demand, with supply risks continuing to support elevated prices despite the expected supply recovery. Struyven explains that "physical prices remain elevated because escalation threatens supply while near-record-low global inventories fuel strong restocking demand."
Global oil consumption in the third quarter of 2026 was down 3.3 mb/d year-on-year, with much of the weakness concentrated in China, the West Asia and developed Asian economies, as reported by Goldman Sachs. The bank estimates that global oil demand in the third quarter was nearly 4 mb/d below its hypothetical path if there had been no oil shock from the war in Iran. Goldman Sachs expects demand to recover gradually as the availability and affordability of refined oil products improve, with the firm assuming that 80% of the gap between actual global demand and the counterfactual will unwind by the fourth quarter of 2027. However, it anticipates that global oil demand will remain 0.7 mb/d below its hypothetical trajectory without the conflict-related shock in the fourth quarter of 2027, partly due to accelerated adoption of electric vehicles and changes in fuel consumption patterns in China. The report estimates that on the demand side, global oil consumption in the third quarter of 2026 was down 3.3 mb/d year-on-year, with much of the weakness concentrated in China, the Middle East and developed Asian economies.
Goldman Sachs emphasizes that the outlook will depend on multiple factors including the pace of supply recovery, demand normalization, and the risk of renewed escalation in the region. According to the report, the firm's forecast assumes that while West Asian supply disruptions have peaked, the risk of renewed conflict could keep prices elevated for longer than expected, potentially limiting the full extent of the anticipated price decline. The bank said the outlook would depend on the pace of supply recovery, demand normalisation and the risk of renewed escalation in the region, with the outlook remaining dependent on these key factors that could influence the market dynamics in 2027. Struyven and his team write that "the forecast that oil demand largely recovers is directionally consistent with the demand recovery from prior negative oil supply shocks in 2011 and 2022, and our view that the weakness in Chinese petrochemicals oil demand is largely unsustainable."
