Goldman Sachs Adjusts Oil Price Forecast

Goldman Sachs has revised its outlook for oil prices as a result of a complex intermingling of economic and geopolitical factors. The investment bank now predicts Brent crude will dip to $62 per barrel and West Texas Intermediate (WTI) to $58 by December 2025. Additional declines are expected by December 2026, with forecasts estimating Brent to reach $55/bbl and WTI at $51/bbl. These projections depend on two primary scenarios: avoiding a severe U.S. recession amid significant tariff reductions (scheduled to start on April 9) and a moderate increase in global supply facilitated by OPEC+ through two increments of 130-140 kb/d in June and July.

Goldman Sachs also presents alternative scenarios where oil prices might stray from these forecasts, citing that a drastic reversal in tariff policies could elevate prices above current forecasts while a sharper global GDP downturn could drive Brent lower—projected to $54/bbl in 2025 and $45/bbl in 2026. The worst-case scenario indicates Brent prices falling below $40/bbl by late 2026, although the bank emphasizes that prices are unlikely to remain under that level for an extended period, primarily due to supportive U.S. shale production and an expected mild U.S. recession in 2025.

Key Insights from the Forecast

• Baseline Estimates:

  • December 2025: Brent at $62/bbl, WTI at $58/bbl.

  • December 2026: Brent at $55/bbl, WTI at $51/bbl.

• Alternative Scenarios:

  • A reversal in tariff policy could hike prices above current projections.

  • A global GDP downturn may bring Brent down to $54/bbl in 2025 and $45/bbl in 2026.

  • In a severe outlook combining economic downturn and unwinding OPEC+ cuts, Brent might plunge just beneath $40/bbl by late 2026.

• Factors That Influence Price Floors:

  • Resilient U.S. shale production is anticipated to maintain a price floor.

  • A potential recession in the U.S., if it occurs in 2025, is forecasted to be mild.

Implications for Investors

Investors and market watchers must be aware of:

• Continued Price Volatility:
  Expect persistent fluctuations in oil prices, especially with geopolitical events and tariff policy changes looming.

• Key Economic Indicators:
  Monitoring essential economic metrics and policy decisions, particularly those of the U.S. regarding tariffs and GDP growth, will significantly influence oil price trends over the next two years.

Resources for Real-Time Data Tracking

For navigating these trends and fine-tuning investment strategies, consider accessing ongoing data through various financial APIs that provide critical insights into oil prices and market dynamics.