Goldman Sachs raises oil price forecasts, warns Brent could hit $140 in 2027

Goldman Sachs identified intensified attacks on shipping, damage to oil infrastructure and a more persistent geopolitical risk premium as key factors that could drive prices higher.

The investment bank raised its December forecast for Brent crude to $105 a barrel from $90 previously. Its forecast for US West Texas Intermediate (WTI) crude was increased to $94 a barrel from $81, the report stated.

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Goldman Sachs also revised upwards its average oil price projections for 2027, lifting its Brent forecast to $88 a barrel from $80 and its WTI estimate to $78 a barrel from $73.

In an upside scenario, Brent crude could reach $140 a barrel and average around $130 in 2027 if average Gulf oil production remains 3.5 million barrels per day below its 2025 average, Reuters reported, citing the bank's projections.

Goldman Sachs expects oil markets to factor in a higher geopolitical risk premium, reflecting potential disruptions to Middle East supplies, the historical duration of major supply shocks and market concerns that a lasting diplomatic breakthrough will be difficult to achieve, according to Reuters.

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The bank identified intensified attacks on shipping, damage to oil infrastructure and a more persistent geopolitical risk premium as key factors that could drive prices higher.

Brent crude slipped more than 1% to $111.84 a barrel on Monday after Iranian and Qatari officials held a third consecutive day of talks aimed at securing an agreement to end the US-Israeli war with Iran.

Despite the decline, Brent ended October at its highest level in six months, amid concerns that the conflict between the US and Iran could escalate again after Tuesday's US midterm elections.

Goldman Sachs also flagged broader geopolitical uncertainties as a significant threat to global energy supplies. The ongoing conflicts in the Middle East and between Russia and Ukraine, alongside increasing geopolitical fragmentation, have heightened the risk of supply disruptions.

The timing and geographical location of potential disruptions remain extremely difficult to predict, the bank said, according to Reuters, highlighting the uncertainty surrounding the global oil market.