Goldman Sachs: Brent to Average $80 in 2027 Amid M’East Oil Supply Recovery
Bank raises December forecast to $90 amid escalation risks Emmanuel Addeh in Abuja Brent crude oil prices are expected to moderate in 2027 as supplies from the Middle East recover from disruptions caused by the conflict involving the United States, Israel and Iran, Goldman Sachs has projected, although the risk of renewed escalation could keep prices elevated. The investment bank stated that it…
Goldman Sachs anticipates Brent crude oil prices to average $80 per barrel in 2027, following a forecast increase to $90 in December 2026. This projection is based on a projected Middle Eastern oil supply recovery from disruptions caused by the conflict between the United States, Israel, and Iran. Although risks of renewed escalation could maintain higher prices, the bank remains optimistic about eventual price reductions as Middle East supplies adjust gradually.
Brent crude prices are currently estimated to be around $130 per barrel for physical crude scheduled for near-term delivery, while benchmark Brent futures have exceeded $100. The recovery in Middle Eastern oil exports has brought supply to approximately 2025 average levels, with tankers carrying dark exports (ships that conceal their movements) making up around four million barrels per day.
However, the report notes that the elevated prices are due to concerns over potential supply disruptions and extremely low global inventories, encouraging buyers to replenish stocks. Additionally, the threat of renewed attacks by Iran or Yemen's Houthi movement on regional oil infrastructure could further restrict supplies and deepen inventory losses.
Demand for oil as a hedge against volatility in stocks and bonds, along with production outside the Persian Gulf and weaker global oil demand, are also supporting prices. Goldman Sachs expects global crude oil and liquid fuels markets to move into surplus in the fourth quarter of 2026, remaining in surplus in 2027 due to higher production outside the Persian Gulf and weaker demand.
The anticipated recovery in global demand is influenced by factors such as the availability and affordability of refined petroleum products. While the bank believes that the crisis could accelerate longer-term changes in energy consumption, particularly in China's adoption of electric vehicles and trucks, these changes may have lasting impacts on oil demand even after supply recovery.
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