Goldman Sachs has updated its oil price outlook, pointing to notable supply interruptions in the Middle East and forecasting sharper declines in inventories, factors that have driven a significant rally in crude prices this year.
The investment bank’s revised projections come as oil shipments through the Strait of Hormuz remain constrained, impacting global markets and prompting cuts in production from major suppliers.
Brent crude has advanced 34% since the start of the year, trading around $82 per barrel. This surge follows marked reductions in exports passing through the Strait of Hormuz, infrastructure damage, and logistical bottlenecks, which together led Iraq to reduce output by about 1.5 million barrels per day. Oil inventories have tightened as a result.
According to Goldman Sachs, Brent is likely to remain within the mid-$80s per barrel in March as traders assess mixed signals about regional supply. While some recovery in flows through the Strait of Hormuz may occur, evidence continues to point toward ongoing production losses. The bank has increased its average Brent forecast for the second quarter of 2026 by $10 to $76 a barrel and lifted its view for U.S. benchmark WTI by $9 to $71.
These updated targets are based on assumptions of continued supply disruptions in the near term. Goldman expects exports via the Strait of Hormuz to persist at about 15% of typical volume for another five days, then gradually rise to 70% over two weeks before returning to standard levels in the subsequent fortnight.
Under these conditions, the bank projects that Middle Eastern production losses could total approximately 200 million barrels in March, with commercial inventories in OECD countries falling by 76 million barrels month-on-month—an adjustment from the previous projection of a 10 million-barrel increase.
The outlook also factors in the expectation that ongoing geopolitical tensions, including uncertainties linked to Iran and the Russia-Ukraine conflict, will keep a risk premium embedded in prices over the next quarter.
Looking ahead, Goldman made more modest forecast adjustments, lifting its Brent projection for the final quarter of 2026 to $66 from $60, and for 2027 to $70 from $65. WTI is now forecast to average $62 in late 2026 and $66 in 2027.
Despite the current strength in oil prices, Goldman Sachs expects a gradual retreat in the latter part of the forecast period as supply disruptions ease and inventories recover. The bank’s baseline expectation is for Brent to decline from near $82 now to about $66 by the end of 2026.
However, extended interruptions to exports through the Strait of Hormuz or additional damage to oil production sites could push prices significantly higher. Should disruptions persist for several more weeks, the bank estimates Brent could reach around $100 per barrel as inventories are depleted further. Conversely, a more rapid restoration of flows through the Strait of Hormuz could pose the main downside risk to near-term prices.
