Goldman Sachs: Brent to Average $80 in 2027 Amid M’East Oil Supply Recovery

Bank raises December forecast to $90 amid escalation risks
Emmanuel Addeh in Abuja
Brent crude oil prices are expected to moderate in 2027 as supplies from the Middle East recover from disruptions caused by the conflict involving the United States, Israel and Iran, Goldman Sachs has projected, although the risk of renewed escalation could keep prices elevated.
The investment bank stated that it expects Brent crude to average $80 per barrel in 2027, while raising its December 2026 forecast to $90 from $85 previously, according to a report published at the weekend by its commodities research team.
The projection comes amid a significant recovery in oil shipments from the Persian Gulf, even as fears of further attacks on energy infrastructure, depleted global inventories and demand for oil as a financial hedge continue to support prices.
Goldman Sachs’ co-head of global commodities research and head of oil research, Daan Struyven, said the bank maintained its expectation that the gradual adjustment of Middle Eastern supplies would eventually ease crude prices, while renewed hostilities remained a major upside risk.
“We maintain our base case that continued adaptation of Middle East supply will eventually reduce crude oil prices, while potential renewed escalation still poses significant net upside risk,” Struyven and his team wrote.
The report estimated that Persian Gulf oil exports had recovered to around their 2025 average by late September, following the initial disruption caused by the conflict. The estimate includes approximately four million barrels per day of so-called dark exports, comprising shipments carried by tankers that switch off their transponders to conceal their movements.
Despite the recovery in exports, physical crude prices remain substantially higher than the bank’s projected longer-term levels. The report said dated Brent, representing physical crude scheduled for near-term delivery, was trading above $130 per barrel, while benchmark Brent futures had recently exceeded $100.
Struyven attributed the elevated prices to the threat of further supply disruptions and exceptionally low global inventories, which have encouraged buyers to replenish stocks.
Potential attacks by Iran or Yemen’s Houthi movement on regional oil infrastructure, including ports, pipelines and oilfields, could further restrict supplies and deepen inventory losses, it predicted.
Goldman Sachs estimated that Brent’s spot price contained a risk premium of nearly $25 per barrel, reflecting the possibility of renewed escalation and additional supply disruptions.
Demand for oil as a hedge against volatility in stocks and bonds was also supporting prices, the report added.
Nevertheless, the bank said it expects the global market for crude oil and other liquid fuels to move into surplus in the fourth quarter of 2026 and remain in surplus in 2027, a development it considers central to its forecast of lower prices.
According to the report, higher production outside the Persian Gulf and weaker global oil demand have helped offset the remaining supply shortfall in the region.
Global oil demand in September was approximately 1.3 million barrels per day below its 2025 average as higher prices encouraged consumers to reduce consumption.
The bank expects Persian Gulf supplies to continue recovering as producers adapt to the conflict and expand transportation capacity, particularly through pipelines and a larger tanker fleet.
The disruption to oil flows through the Strait of Hormuz has also weighed heavily on consumption, bringing the market closer to balance.
Global oil demand in the third quarter of 2026 fell by 3.3 million barrels per day year-on-year, with much of the decline concentrated in China, the Middle East and developed Asian economies, according to Struyven.
The bank estimated that third-quarter demand was nearly four million barrels per day below what it would have been without the oil shock associated with the conflict.
However, it expects about 80 per cent of that demand shortfall to be recovered by the fourth quarter of 2027 as refined petroleum products become more available and affordable. Under that projection, the remaining impact on global demand would narrow to approximately 700,000 barrels per day.
The bank said the anticipated recovery was consistent with the pattern observed after previous oil supply shocks in 2011 and 2022, while describing the weakness in Chinese petrochemical demand as largely unsustainable.
However, the report warned that the crisis could accelerate longer-term changes in energy consumption, particularly the use of existing electric vehicles and trucks in China as alternatives to oil-powered transport, alongside increased electric vehicle sales.
These changes, it pointed out, could leave a lasting impact on oil demand even after supplies recover.
Goldman Sachs’ outlook therefore rests on the assumption that Middle Eastern exports will continue to improve, global demand will recover gradually and no major escalation will cause another prolonged disruption to supply.