Goldman Sachs Boosts Oil Price Forecast Amid Rising Geopolitical Tensions and Supply Disruption Fears

Goldman Sachs has revised its near-term oil price projections upward, citing escalating geopolitical risks and a heightened probability of crude supply disruptions originating from the Middle East. The investment bank now anticipates Brent crude to reach US$105 per barrel by December, an increase from its prior estimate of $90. Furthermore, its average price forecast for 2027 has been raised to $88 per barrel, marking a 10 percent ascent from its earlier projection.

According to Bloomberg, analysts at Goldman Sachs indicated that persistent risks to oil supplies could maintain an elevated "risk premium" in the immediate future. This adjustment comes as market concerns intensify regarding potential geopolitical escalation following the US midterm elections. The analysts also pointed to the increasing attacks on ships and damage to infrastructure, compounded by the ongoing repercussions of the Russia-Ukraine war, as factors that could precipitate further disruptions in oil markets.

In its baseline scenario for 2027, Goldman Sachs has factored in the possibility of a global supply disruption amounting to approximately one million barrels per day. In a more optimistic price scenario, Brent crude could potentially surge to $140 per barrel, with an average price hovering around $130 per barrel over the coming year. This optimistic outlook is contingent on production from Gulf states remaining about 3.5 million barrels per day below their 2025 average levels, as reported by Reuters.

Conversely, a bearish scenario suggests that oil futures prices could decline below $70 per barrel if production in the region experiences a more rapid recovery, leading to a faster return of supplies to the market.