Global crude oil prices could moderate to USD 80 per barrel in 2027 as Middle East supplies recover and the oil market moves towards a surplus, although renewed escalation in the US-Israel-Iran conflict could keep prices elevated for longer than expected, according to Goldman Sachs Research.
The firm expects benchmark Brent crude to trade at USD 90 per barrel in December 2026, revising its previous forecast of USD 85, before averaging USD 80 per barrel in 2027, Daan Struyven, co-head of global commodities research and head of oil research at Goldman Sachs, said in a report.
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The firm said the recovery in Middle Eastern oil exports, higher production outside the Persian Gulf and weakening demand had significantly narrowed the global supply deficit. The market was nearly balanced in September, with demand exceeding supply by just 0.3 million barrels per day (mb/d), compared with a deficit of 7.2 mb/d in March.
Goldman Sachs expects the global oil market to move into a surplus in the fourth quarter of 2026 and remain in surplus in 2027, supporting its outlook for lower prices.
The bank estimated that Persian Gulf oil exports had recovered to around their 2025 average by late September, partly due to exporters adapting to the conflict and expanding transportation capacity.
However, supply risks continue to support elevated prices. Physical Brent crude prices for near-term delivery have exceeded USD 130 per barrel, while benchmark Brent futures have recently traded above USD 100.
"Physical prices remain elevated because escalation threatens supply while near-record-low global inventories fuel strong restocking demand," Struyven said.
The report estimated that crude prices currently include a risk premium of nearly USD 25 per barrel, reflecting the possibility of further supply disruptions and additional inventory drawdowns if the conflict escalates.
On the demand side, global oil consumption in the third quarter of 2026 was down 3.3 mb/d year-on-year, with much of the weakness concentrated in China, the Middle East and developed Asian economies.
Goldman Sachs expects demand to recover gradually as the availability and affordability of refined oil products improve. However, it expects global oil demand to remain 0.7 mb/d below its hypothetical trajectory without the conflict-related shock in the fourth quarter of 2027, partly due to accelerated adoption of electric vehicles and changes in fuel consumption patterns in China.
The bank said the outlook would depend on the pace of supply recovery, demand normalisation and the risk of renewed escalation in the region.