Goldman Sachs late on Sunday raised its 2026 average price forecast for Brent crude oil to $85 per barrel (bbl) from $77, while raising its West Texas Intermediate (WTI) forecast to $79/bbl from $72.
The bank expects extended disruptions to crude shipments through the Strait of Hormuz and increased strategic stockpiling to drive the market into a tighter and more risk-averse posture.
Goldman also expects Brent to average $110/bbl in March and April, up from a prior forecast of $98, as traders attach a growing risk premium amid uncertainty over how long supply disruptions will last.
“The price when uncertainty peaks may be $135/bbl if the market required a risk premium to generate precautionary demand destruction offsetting supply destruction over six months in a risk scenario of 10 weeks of very low flows and (2 million barrels a day) of persistent production losses,” Goldman said in a note.
The bank outlined two upside risk factors to its forecasts: One where a prolonged Hormuz disruption pushes Brent past its 2008 peak and another where a sustained 2 million barrels per day supply loss in Mideast production leads to a spike in prices.
Meanwhile, a potential end to U.S. military action in the region could quickly erode the risk premium, while Washington’s possible consideration of oil-export restrictions could widen the Brent–WTI price gap further, Goldman said.
Goldman forecast Brent and WTI to remain stable at $80 and $75, respectively, through 2027 as the easing effect from the price response of supply and demand roughly offsets the tightening effect from countries rebuilding their strategic oil reserves.
Brent crude futures were recently down 8 cents to $112.11 a barrel, while U.S. West Texas Intermediate was down 6 cents at $98.17 a barrel, by 2324 GMT.
On the geopolitical front, Iran on Sunday said it would strike the energy and water systems of its Gulf neighbours if U.S. President Donald Trump follows through with a threat delivered a day earlier to hit Iran’s electricity grid in 48 hours.
(Reporting by Noel John and Pablo Sinha in Bengaluru; Editing by Christopher Cushing and Thomas Derpinghaus)