Goldman Sachs has raised its oil price forecasts for year-end and 2027 amid rising supply risks, following months of conflict in the Middle East, with other banks also revising their outlooks upward.
Analysts Daan Struyven and Yulia Zhestkova Grigsby stated in a report that Brent crude is now expected to average $105 per barrel in December, up from the previous forecast of $90, while the average price for next year is projected at $88 per barrel—10% higher than earlier estimates. The report also increased projections for West Texas Intermediate (WTI), the U.S. crude benchmark.
“Supply-side downside risks remain substantial, which could keep risk premiums elevated in the near term,” the analysts wrote. In a report dated November 1, they added that markets are “increasingly focused on potential escalations following the U.S. midterm elections on November 3 and possible subsequent weakening of Middle Eastern supply.”
The global benchmark Brent crude rose 14% in October, reaching a six-month high, despite Middle Eastern oil supplies returning close to pre-conflict levels. The rally stemmed from market concerns over renewed hostilities between the U.S. and Iran after the midterm elections, with former President Trump repeatedly hinting at a possible resumption of airstrikes. Meanwhile, Iran’s supreme leader has ordered senior commanders to prepare for a new round of confrontation.
Analysts noted that intensified shipping attacks and infrastructure damage could be among the factors driving further oil price increases, while also highlighting risks posed by Russia’s invasion of Ukraine. “Given the unpredictable timing and location of supply disruptions, our current base-case scenario includes a preparedness buffer of 1 million barrels per day in global supply disruption by 2027.”
In recent weeks, Morgan Stanley raised its fourth-quarter forecast for Brent crude futures—the key spot price—to $105 per barrel, while ANZ Group Holdings Limited also lifted its year-end forecast for Brent crude futures to the same level. After falling during Monday trading, the most active contract closed near $110 per barrel.