Goldman Sachs Swings on Oil: $120 Brent Possible Amid Mideast Shipping Risks
Goldman Sachs has swiftly reversed its recent oil price cuts, now forecasting higher crude prices for 2026 and 2027, with Brent potentially exceeding $120 per barrel in an upside scenario driven by persistent Middle East shipping disruptions.
The short version
- Goldman Sachs raised its Brent crude oil price forecast for December 2026 by $5/bbl to $85/bbl and for the 2027 average to $80/bbl.
- The firm also increased its West Texas Intermediate (WTI) crude oil price forecast for December 2026 by $5/bbl to $80/bbl and the 2027 average to $75/bbl.
- Daan Struyven, Goldman Sachs Global Head of Commodities Research, highlighted the risk of broadening and intensifying shipping disruptions in the Middle East.
- An "upside scenario" could see Brent crude exceed $120/bbl in 2027 if average Gulf output remains 4 million barrels per day below pre-war levels.
- This swift reversal follows Goldman Sachs having lowered its oil price forecasts just days prior, based on earlier hopes for de-escalation.
Goldman Sachs has executed a swift reversal on its oil price outlook, significantly raising its forecasts for both Brent and West Texas Intermediate (WTI) crude for late 2026 and the 2027 average. The investment bank now suggests that Brent crude could even surpass $120 per barrel in an "upside scenario," driven primarily by concerns over persistent shipping disruptions in the Middle East. This recalibration comes just days after the firm had lowered its oil price expectations, making the current shift a notable "reversal of engines," according to MarketWatch.
At the time of Goldman's revised call, Brent crude was trading near $97/bbl, underscoring the market's sensitivity to geopolitical developments.
Why did Goldman Sachs reverse its oil price forecasts?
Goldman Sachs' reversal stems from an expectation that geopolitical tensions in the Middle East will continue to cause shipping disruptions into 2027. Recent re-escalation of hostilities, including US strikes on Iranian oil tankers following Iran's Islamic Revolutionary Guard Corps targeting US warships with ballistic missiles, has heightened concerns. Iran's Parliament Speaker Mohammad Bagher Qalibaf stated that the era of "proportionate responses" is over, and future retaliations would be "faster, heavier and more painful." Additionally, Mohsen Rezaei, head of Iran's Supreme National Security Council, announced a new "exclusion zone" extending from the US naval blockade line towards the Strait of Hormuz and into the Persian Gulf, threatening sanctions on any identified ship entering it with the intent to pass through the Strait. These events have changed the calculus for oil shipping, pushing Goldman Sachs to adjust its outlook after having previously lowered forecasts based on hopes for de-escalation and a U.S.-Iran preliminary agreement to reopen the Strait of Hormuz.
What are Goldman Sachs' new oil price forecasts?
Goldman Sachs updated its forecasts on September 7-8, 2026, raising its projections across the board. The firm now expects Brent crude oil to reach $85/bbl by December 2026, a $5/bbl increase from its previous forecast. For the 2027 average, Brent crude is projected at $80/bbl, also up $5/bbl. Similarly, Goldman Sachs raised its West Texas Intermediate (WTI) crude oil price forecast for December 2026 by $5/bbl to $80/bbl, and its 2027 average forecast for WTI is now $75/bbl, also a $5/bbl increase.
What is the $120/bbl oil price upside scenario?
Goldman Sachs has outlined an "upside scenario" where Brent crude could exceed $120/bbl in 2027. This projection is contingent on average Gulf output remaining 4 million barrels per day (mbpd) below pre-war levels. It's important to note that this is an explicitly identified upside risk and not the firm's base-case forecast for crude prices. Daan Struyven, Goldman Sachs Global Head of Commodities Research, told Bloomberg TV that "Events over the last few days do suggest that the risk of shipping disruptions broadening and intensifying is an important one."
Are there any downside risks to oil prices?
Yes, Goldman Sachs also identifies downside scenarios for crude prices. Brent crude could decline into the $60s in 2027 if average Gulf output were to rise 1 mbpd above pre-war levels. Another downside scenario suggests Brent crude could be around $80/bbl if regional exports normalize, according to the bank.
What are Goldman Sachs' recommended investment plays?
While Goldman Sachs sees "meaningful upside to crude oil prices," the firm has recommended a different strategy for investors looking to hedge against geopolitical risk. Daan Struyven advised betting on natural gas and refined product prices, such as diesel, rather than crude oil directly. This recommendation is based on the assessment that "the supply shocks are bigger than in the crude market" for natural gas and refined products, according to Struyven.
This is educational information, not legal, financial, tax, or investment advice.
Frequently asked questions
Who made these revised oil price forecasts?
The revised oil price forecasts were issued by Goldman Sachs, with Daan Struyven, the firm's Global Head of Commodities Research and Co-head of global commodities research, being the key person involved in the announcement.
What caused Goldman Sachs to change its oil price outlook so quickly?
Goldman Sachs' rapid shift was primarily driven by the expectation that shipping disruptions in the Middle East will persist into 2027 due to ongoing geopolitical tensions, including recent escalations and Iran's announcement of an 'exclusion zone' in the Persian Gulf.
Does Goldman Sachs expect oil prices to definitely reach $120 per barrel?
No, the $120/bbl figure represents an "upside scenario" for Brent crude, not a base-case forecast. It is a possibility if average Gulf output remains 4 million barrels per day below pre-war levels, indicating a more severe and prolonged supply disruption.
Reported by the RevReck Newsroom from the reporting linked below, with AI assistance in drafting, under editorial rules covering accuracy, attribution and what we will not publish. Read our editorial standards, or email corrections to operations@revreck.com.