Goldman Sachs Lifts 2026-2027 Oil Forecasts on Persistent Middle East Disruption Fears

Goldman Sachs has raised its price forecasts for Brent and WTI crude oil, citing expectations that shipping disruptions in the Middle East will persist into next year. In a note published Sunday, analysts at the bank signaled that the market is increasingly pricing in the risk of a prolonged conflict.

Revised Price Targets

Analysts led by Daan Struyven increased their December 2026 price forecasts by $5 per barrel for both benchmarks. The new targets are:

• Brent crude: $85 per barrel (up from $80)
• West Texas Intermediate (WTI): $80 per barrel (up from $75)

For 2027, the bank adjusted its forecast to $80 per barrel for Brent and $75 for WTI. Goldman noted that markets are reflecting this heightened risk, with the implied probability of Brent crude options exceeding $100 by March 2027 jumping from approximately 6% a month ago to about 25% now.

A 'Modest' Increase

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Despite the upward revision, Goldman characterized the forecast change as "modest," pointing to several mitigating factors. Firstly, OECD commercial oil inventories, a key price driver, have not seen a significant decline since the conflict began. The bank stated that inventory draws have been concentrated in strategic reserves, floating storage, and China.

Secondly, the firm's base case assumes that supply adaptations in the Middle East will continue, with expanded pipeline usage expected to help production gradually recover by the second half of 2027. Analysts also noted that price-sensitive crude imports by China remain down approximately 30% year-over-year, which is expected to limit further price upside.

Risks Skewed to the Upside

Goldman Sachs warned that risks to its forecast remain "significantly skewed to the upside, especially in the near term." In a bull-case scenario, if average Gulf production were to fall by 4 million barrels per day below pre-war levels—compared to a 500,000 bpd drop in the base case—Brent prices could surge past $120 per barrel.

Strategists identified an escalation of attacks on shipping in the Strait of Hormuz and the Red Sea as the most likely trigger for such a scenario. Conversely, in a bearish scenario where Gulf production averages 1 million barrels per day *above* pre-war levels, Brent prices could fall into the $60 range in 2027.