Goldman Sachs has sharply increased its oil price forecasts, citing mounting geopolitical tensions in the Middle East and the Russia-Ukraine conflict as key drivers for higher supply disruption risks. The investment bank now projects Brent crude to reach $105 per barrel by December, up from $90, and includes a 1 million barrels per day global supply disruption allowance in its 2027 base case. Furthermore, it raised its 2027 average forecasts for both Brent and WTI crude, signaling a sustained bullish outlook driven by global instability.
Wall Street giant Goldman Sachs has significantly revised its oil price forecasts upwards for both December and 2027, attributing the bold move to an escalating risk of supply disruptions stemming from ongoing geopolitical conflicts. The investment bank highlights the persistent tensions in the Middle East and the Russia-Ukraine war as critical factors contributing to a heightened risk premium now being priced into global oil markets.
In a recent note spearheaded by strategist Daan Struyven, Goldman Sachs emphasized the difficulty of predicting the timing and location of potential supply interruptions. "The Mideast and Russia-Ukraine conflicts, alongside broader geopolitical fragmentation, create high disruption risk," the bank stated. Consequently, its base case scenario now includes an allowance for a substantial 1 million barrels per day global supply disruption in 2027.
This revised outlook sees Goldman Sachs lifting its December forecast for Brent crude to an assertive $105 per barrel, a significant jump from its previous projection of $90. Similarly, the forecast for WTI crude for December has been raised to $94 per barrel.
Looking further into the future, the investment bank also adjusted its average forecasts for 2027. Brent crude is now expected to average $88 per barrel, up from the prior $80, while WTI crude's 2027 average forecast climbs to $78 per barrel from $73. These adjustments underscore Goldman's conviction that geopolitical instability will continue to exert upward pressure on crude prices in the medium to long term. (Visual representation of Brent crude year-to-date performance, often depicted as a mountain chart, would illustrate this trend.) (Similarly, a year-to-date performance chart for WTI crude would show its corresponding trajectory.)
