Global Market: Goldman Sachs raises December Brent oil price forecast to $90 on supply risks

Goldman Sachs raises December Brent crude target to $90

The investment bank maintained its base-case view that adjustments to Middle Eastern oil supplies would eventually bring crude prices down, although a renewed escalation in regional tensions could pose a significant upside risk, Reuters reported, citing a Goldman Sachs research note published on Sunday.

Goldman Sachs kept its forecast for average Brent crude prices in 2027 unchanged at $80 per barrel. It expects US West Texas Intermediate (WTI) crude to average $81 per barrel in December 2026 and $73 per barrel in 2027.

However, the bank warned that prices could rise substantially if disruptions to Gulf oil production persist. Brent crude could average around $125 per barrel in 2027 if average Gulf output remains 5 million barrels per day below February 2026 levels. This compares with a shortfall of just 300,000 barrels per day under its base-case scenario.

Conversely, an increase in average Gulf production to 1 million barrels per day above February 2026 levels could push Brent prices into the $60-per-barrel range in 2027, Goldman Sachs estimated. The projections highlight how the outlook for crude prices remains highly sensitive to the scale and duration of supply disruptions in the region.

Oil prices slipped on Monday as expectations of increased Russian supplies weighed on the market. US President Donald Trump said Ukraine and Russia had agreed to halt attacks on each other's energy facilities following a US deal with Moscow to supply diesel, Reuters reported.

The prospect of additional Russian oil supplies could ease some pressure on global markets, although uncertainty surrounding Middle Eastern production continues to complicate the price outlook.

Goldman Sachs also outlined hedging strategies for investors and oil producers amid the possibility of sharp price swings. The bank recommended long positions in European gasoline for summer 2027 for investors seeking protection against rising oil prices.

For oil producers looking to protect themselves against falling prices, Goldman Sachs recommended put spreads, a strategy that can provide downside protection while retaining some exposure to potential price gains, Reuters reported.

The bank's revised forecast underscores the competing forces shaping the oil market: the possibility of supply adjustments and increased Russian exports on one side, and the risk of renewed geopolitical escalation and prolonged Gulf production losses on the other.