Goldman Sachs Cuts 2027 Average Brent Crude Price Forecast to $80
N.R. Finch
Goldman Sachs lowered its 2027 average Brent crude forecast to $80 a barrel, citing rising supply from multiple producers and a structural demand shift in China — signaling a medium-term oversupply outlook even as geopolitical risks fade.
What does the $80 forecast really say?
Goldman on Thursday cut its 2027 Brent average forecast to $80 per barrel.
Supply pressure comes from five sources: the U.S., Brazil, Guyana, Venezuela, and the UAE — all ramping up production.
This means → even if Middle East tensions flare occasionally, enough global "taps" are open to cap the price ceiling.
What is happening to Chinese demand?
Goldman stated explicitly: more than 10% of demand weakness will persist, as China's shift to alternatives like EVs accelerates.
In plain terms = China is not temporarily buying less oil — it is fundamentally changing how it uses energy. That drag on prices is long-term and will not reverse with an economic uptick.
This reflects Goldman's reclassification of China's energy transition as a structural factor, not a cyclical blip.
How large is the 2026 supply gap?
Goldman holds its Q4 2026 Brent forecast at $90 a barrel, above the 2027 figure.
The estimated global supply shortfall in Q2 this year is 5–6 million barrels per day, below prior market expectations.
This means → the impact of the Strait of Hormuz disruption — the chokepoint linking the Persian Gulf to open sea — has been partly offset by weaker demand and earlier oversupply.
How will the Hormuz situation evolve?
Goldman's base case: Gulf oil exports normalize by the end of August (previously expected by end of June) — a roughly two-month delay.
The assumed path is strait traffic recovering to 70% of pre-conflict levels, supplemented by existing rerouting arrangements.
In plain terms = Goldman does not need full restoration — seventy-percent throughput plus detour routes is enough.
How high — or low — could prices go in extreme scenarios?
Upside risk: if export disruptions last longer, Brent could reach above $110 by end-2026; if the Hormuz disruption persists through all of 2027, the extreme case puts oil at $140.
Downside risk: if supply normalizes faster than expected and demand weakens further, Brent could fall to $70 by end-2026 and slide to $60 in 2027.
This means → Goldman's range spans $60 to $140 — whether the $80 baseline holds ultimately depends on the pace of Hormuz normalization and the actual depth of China's demand decline.
Content is for reference only, not financial advice.