Oil Supply Recovering According to Goldman Sachs, But Risks Persist

Goldman Sachs Research expects oil prices to decline next year with the gradual recovery of oil supply from the Middle East. However, it is stated that the risk of escalation in conflicts involving the US, Israel, and Iran could cause high prices to last longer than anticipated.

Daan Struyven, Co-Head of Global Commodities Research and Head of Oil Research at Goldman Sachs, expects Brent crude to trade at $90 per barrel in December 2026. Raised from the previous forecast of $85, Brent crude is projected to average $80 in 2027. On ICE, the March 2027 oil futures contract traded at $101.53, the June 2027 contract at $95.62, and the November 2027 contract at $87.88.

Oil exports from the Persian Gulf have recovered to around the 2025 average since the end of September. This calculation also includes approximately 4 million barrels per day of dark exports, where tankers are estimated to have turned off their transponders. Nevertheless, Goldman Sachs explains that physical oil prices remain high due to supply disruption risks and global inventories hovering near record-low levels. There is a risk premium of about $25 above fair value in Brent spot prices due to the potential for further escalation.

The supply-demand balance in the global crude oil and other liquid fuels market is projected to return to a surplus in the fourth quarter of 2026 and in 2027. The supply deficit, which stood at 7.2 million barrels per day in March, dropped to 0.3 million barrels per day in September. On the other hand, global oil demand decreased by 3.3 million barrels per day year-on-year in the third quarter of 2026. It was noted that this weakness was concentrated in China, the Middle East, and OECD Asia countries, and that the war in Iran also accelerated the adoption of electric vehicles in China, leading to permanent behavioral changes.