Goldman Sachs has increased its forecast for Brent crude oil prices to $105 per barrel for December 2026. This upward revision is due to significant risks of reduced oil supply in the Middle East, despite improved production. The bank's strategists, led by Dan Struyven, have also raised their forecast for West Texas Intermediate (WTI) oil prices from $81 to $94.
Political Impacts on Oil Price Forecast
Estimates indicate that the fair value of Brent oil has remained in the range of $90 to $99 in September and October. According to Goldman Sachs strategists, the market now considers a higher likelihood of escalating conflicts following the U.S. midterm elections on November 3. Based on conducted analyses, the likelihood of an end to the ceasefire between Iran and the U.S. due to escalating conflicts is expected to rise from 10% before the elections to about 50% by November 15 and nearly 75% by the end of the year.
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Various Oil Price Scenarios
Goldman Sachs pointed out that a $27 risk for oil relates to a scenario in which Middle Eastern oil production decreases by 5 million barrels per day for six months. In this case, Brent oil prices could reach $140 per barrel. It is also expected that the average price of Brent oil in 2027 will rise to about $130 per barrel.
Conversely, if oil production in Gulf countries is 2.5 million barrels per day above the 2025 level and no supply disruptions occur, Brent oil prices will decrease to the range of $60 to $69 per barrel. Therefore, the future path of oil prices will heavily depend on the fate of Middle Eastern conflicts and the speed of the return of oil production and exports in the region.
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