Goldman Sachs expects oil prices to average $76 a barrel in 2025 based on a moderate crude surplus and spare capacity among major producers, with concerns easing over a potential disruption in Iranian supply, it said in a note on Tuesday.
“Overall, we still see the medium-term risks to our $70-85/bbl range as two-sided but skewed moderately to the downside on net as downside price risks from high spare capacity and potentially broader trade tariffs outweigh upside price,” Goldman said.
The investment bank said there is a possibility prices could rise towards year-end as it sees Brent time spreads “underpricing physical tightness somewhat”.
“Despite large global spare capacity and so far undisrupted Iran oil production, we don’t think that a 2025 supply glut is a done deal,” Goldman analysts said.
The geopolitical risk premium is limited, they said, as Israel-Iran tensions have not affected oil supply from the region and as spare capacity is high among producers in OPEC+, which groups the Organization of Petroleum Exporting Countries and allies, they said.
However, supply risks will persist as long as the conflict in the Middle East remains unresolved, and potential disruptions could tighten oil balances.
Oil prices settled higher on Tuesday for the second consecutive session, with Brent futures at $76.04, as traders downplayed hopes of a Middle East ceasefire and focused on signs of improving demand from China.
(Reporting by Anmol Choubey and Brijesh Patel in Bengaluru; Editing by Sonali Paul)