Goldman hikes oil prices forecast on high supply disruption risks

Goldman Sachs raised its price forecasts, saying substantial downside risks to Middle East supply will sustain a large near-term risk premium despite a recovery in regional output that is proceeding as expected.

Strategists led by Daan Struyven lifted their December 2026 forecast to $105 a barrel from $90, and their forecast to $94 from $81. The 2027 average forecasts rose to $88 for Brent from $80, and to $78 for WTI from $73.

A jump in the risk premium to around $27 a barrel “now explains most of October’s crude price rally,” strategists said, with spot Brent futures reaching $118. Goldman estimates Brent’s fair value was little changed in September and October, in the $90s, because global inventories, its main driver, were roughly flat as adaptation rebalanced output and consumption.

The market is now assigning more weight to escalation after the Nov. 3 U.S. midterms, the strategists said. The Polymarket-implied probability that the U.S.-Iran ceasefire ends due to escalation rises from 10% before the midterms to about 50% by Nov. 15 and about 75% by year-end.

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