Goldman Predicts Oil Crash Until 2026
Goldman Sachs predicts oil prices will continue to trend downward until 2026 due to a surge in production that has left the market in a large surplus of around 2 million barrels per day. The investment bank predicts Brent will average USD 56 per barrel and WTI USD 52 in 2026, lower than current futures prices of around USD 63 for Brent and USD 60 for WTI.
According to Goldman Sachs, this surge in new supply will primarily come from long-term oil and gas projects whose investment decisions were made before the pandemic, were delayed during COVID, and are now coming into production simultaneously. Furthermore, there is the impact of OPEC's strategic decision to begin unwinding production cuts. Since April, OPEC+ (OPEC, along with Russia and its allies) has continued to increase output, while other producers such as the US and Brazil have also increased production. The International Energy Agency (IEA) projects an even larger surplus next year, reaching 4.09 million barrels per day.
Although short- and medium-term projections appear bearish, Goldman Sachs estimates that oil prices could begin to recover starting in 2027. Low prices in 2025–2026 are expected to suppress production from non-OPEC countries, while few new projects will be launched after 15 years of underinvestment in the upstream sector. In the long term, Goldman Sachs forecasts Brent/WTI to rise to USD 80/76 by the end of 2028.
However, the price path will not be smooth. Goldman Sachs estimates that in 2026/2027, Brent prices could fall to the USD 40s if non-OPEC supply remains strong or if the global economy enters a recession. Conversely, Brent could break above USD 70 per barrel if Russian supply falls more sharply than expected. Currently, Brent futures are trading around USD 64.31 per barrel, while WTI is around USD 60.02 per barrel in recent trading. (asd)
Source: Bloomberg.com
