Oil prices may ease to $80 per barrel in 2027 as West Asia supply recovers: Goldman Sachs

Goldman Sachs projects oil prices could decline to $80 per barrel by 2027 as West Asia oil exports increase and the global market transitions to a surplus, although geopolitical tensions could prolong elevated prices. The bank anticipates benchmark Brent crude at $90 per barrel in December 2026, up from its earlier estimate of $85.

Actual demand exceeded supply by only 0.3 million barrels per day (mb/d) in September, compared to a March deficit of 7.2 mb/d. The firm expects global oil markets to become surplus in Q4 2026 and stay in surplus in 2027, pressuring prices downward. While Persian Gulf oil exports have almost returned to 2025 averages, ongoing supply risks keep prices higher.

Near-term Brent crude prices have exceeded $130 per barrel, and futures have recently traded above $100. Goldman Sachs estimates a risk premium of nearly $25 per barrel, reflecting potential further supply disruptions if the conflict escalates. Demand for oil in Q3 2026 declined by 3.3 mb/d year-on-year, primarily in China, West Asia, and developed Asian economies.

Goldman Sachs forecasts demand to gradually recover as refined oil products become more affordable, but global demand will remain 0.7 mb/d below its pre-conflict growth projection in Q4 2027 due to electric vehicle adoption and changing fuel consumption patterns in China. The bank's outlook hinges on the pace of supply recovery, demand normalization, and the risk of renewed regional conflict.