Goldman Sachs has revised its crude oil outlook, bumping its December Brent crude price forecast to $90 per barrel, up from its previous estimate of $85. The upward revision is driven primarily by persistent geopolitical tensions and escalating supply-side vulnerabilities in the Middle East.
Despite the revision, the bank’s projected target for December sits below current spot levels, as global benchmark Brent trades higher amid ongoing regional conflicts and maritime transit concerns.
Key Drivers Behind the Forecast Revision
-
Persistent Middle East Conflict & Supply Disruptions:
Ongoing hostilities, security incidents near critical maritime chokepoints like the Strait of Hormuz, and infrastructure threats have kept risk premiums elevated. Goldman Sachs analysts noted that persistent downside risks to production and export flows will likely slow the moderation of the current risk premium, which they estimate to be sitting at over $20 per barrel.
-
High Sensitivity and Physical Restocking Demand:
Low global inventories, combined with strong sensitivity to supply shocks, are driving robust demand for physical restocking and financial hedging, which continues to support elevated futures pricing.
-
Base Case vs. Upside Risks:
While Goldman Sachs maintains its base-case assumption that regional supply adaptations will eventually exert downward pressure on prices over the longer term, the threat of renewed escalation poses significant net upside risks.
Broader Outlook & Projections
-
WTI Forecasts: Alongside Brent, the investment bank projects West Texas Intermediate (WTI) crude to average $81 a barrel for December 2026, constrained partially by wider shipping cost differentials between the US and international markets.
-
2027 Projections: Looking further ahead, Goldman Sachs has left its average 2027 Brent forecast unchanged at $80 a barrel, balancing expectations of faster-than-expected recovery in Gulf production against a gradual unwinding of geopolitical risk premiums.
