Goldman Sachs Sees Brent Crude Lower to $60/b by End-2026

Goldman Sachs expects Brent to fall to $60 by late 2026 which it sees as the cycle low — as the risk premium fades and inventories eventually rise.

The bank also lifted its fourth-quarter 2026 oil price forecasts, citing tighter Organisation for Economic Co-operation and Development (OECD), inventories, while the bank maintained its view of a sizeable global surplus.

Brent crude has rallied to about $71 as Iran-related supply concerns boosted positioning and the risk premium while OECD inventories have failed to build as expected. This reflects January supply disruptions and the fact that much of the global surplus is accumulating as sanctioned crude “stuck at sea,” strategists led by Daan Struyven said.

Against that backdrop, Goldman raised its 2026 fourth-quarter Brent and West Texas Intermediate (WTI) forecasts by $6 to $60 and $56 per barrel, respectively. The bank still expects Brent to fall to $60 by late 2026 — which it sees as the cycle low — as the risk premium fades and inventories eventually rise.

The revision comes despite Goldman maintaining its global oil surplus forecast of 2.3 million barrels per day for 2026. Strategists said lower OECD inventories matter more for pricing and now assume only 19 per cent of global inventory builds will materialize in OECD commercial stocks, down from 27 per cent previously.

Instead, they expect about 25 per cent of the surplus to accumulate as Russia and Iran crude stored at sea, reflecting persistent demand shortfalls for sanctioned barrels. Excluding those floating barrels, the effective surplus would shrink to 1.7 million barrels per day.

On supply, Goldman still sees strong growth outpacing demand next year. It maintained its 2026 surplus view assuming no major supply disruption and no Russia-Ukraine peace, noting that January disruptions in Kazakhstan and Venezuela appear mostly temporary.

Looking further out, the Wall Street firm expects oil prices to strengthen from 2027 as markets rebalance. Strategists forecast Brent and WTI to average $65 and $61 in 2027 and to reach $70 and $66 by December 2027 on “solid demand growth and slowing non-OPEC supply growth.”

Geopolitics remain a key swing factor. The strategists said risks to their outlook are “two-sided but skewed to the upside,” with scenarios such as a 1 million barrel-per-day hit to Iranian supply potentially lifting Brent to around $68 in late 2026