Goldman hikes Q4 oil price forecast on lasting war risks

Goldman Sachs has raised its fourth-quarter price forecast for the Brent crude benchmark to $90/b on longer-than-expected shipping disruptions via the Strait of Hormuz, it said April 27.

After two months of disruptions to Persian Gulf oil exports, the US investment bank now expects flows to normalize by late June, over a month later than previously projected.

It consequently upgraded its Q4 Brent crude outlook by $10/b, and now sees the US WTI light sweet crude marker averaging $83/b, up from a $75/b forecast.

The outlook is nearly $30/b higher than before the war erupted, and reflects expectations of a longer lead time for production to recover once shipping traffic is restored.

Already, the conflict has driven global oil inventories to the lowest on record since satellite tracking began in 2018, with stock draws projected to have averaged a record 11 million-12 million b/d in April, according to the bank.

The supply shock is estimated at 14.5 million b/d of lost Gulf production, which has only been marginally offset by 1 million b/d of combined production increases from countries like Russia and the US, it said.

In the US specifically, production increases have been capped by market expectations of only a short-term shock to Middle Eastern flows, shale capital discipline and negative prices for associated gas, the note said.

As a result, Goldman Sachs analysts nudged up 2026 US production forecasts by only 300,000 b/d. Additionally, the bank said it would not rule out US crude and refined product export restrictions, contrary to previous assurances from Washington.

Over the full year, lasting disruptions could push the market from a 1.8 million b/d oil surplus to a deficit of 9.6 million b/d in Q2 2026, the bank said.

In an April forecast, analysts at S&P Global Energy CERA forecast the world to retain a shallow supply surplus of 500,000 b/d over the full year 2026, but warned of further downgrades subject to the duration of the shock.

Should disruption persist for longer, prices could react strongly. In an adverse scenario where exports only normalize by the end of July, Brent would average over $100/b in Q4, or almost $120/b if flows fail to return to 70% of pre-war levels by then.

In contrast, if flows rebound by mid-June, markets could avoid the worst of the potential shock, keeping prices just below $80/b. Prices have eased from a late-March peak due to hopes for a ceasefire and global destocking, but storage releases can only temper prices for so long, the bank warned.

In its base case, Goldman Sachs sees rising prices producing a 1.7 million b/d demand loss in Q2 2026, and 100,000 b/d over the full year.

"Because extreme inventory draws are not sustainable, even sharper demand losses could be required if the supply shock persists longer," the bank said.

Platts, part of S&P Global energy, last assessed the physical Dated Brent crude benchmark at $112/b on April 24, down from an April 7 peak of $144/b. In 2025, prices averaged $69/b.