Goldman Sachs raised its oil price forecasts for the second half of 2025, citing the risk of supply disruption, lower oil inventories in Organisation for Economic Co-operation and Development countries and Russia’s production constraints.

The bank expects Brent crude to average $66 a barrel in the second half of 2025, up $5 from its previous forecast, and WTI at $63, up $6. Its 2026 forecasts remain unchanged at $56 for Brent and $52 for WTI.

“Our unchanged 2026 price forecast reflects an offset between a boost from higher long-dated prices and a hit from a wider 1.7 million barrels per day 2026 surplus,” the bank said. Previously, it expected a surplus of 1.5 mbpd.

Goldman Sachs now expects OPEC+, the Organization of the Petroleum Exporting Countries and allies, to unwind 2.2 mbpd of cuts by September, including a final 0.55 mbpd increase.

Goldman flagged a range of possible outcomes. A drop in Iranian supply could push Brent up to $90, while increased stockpiling by countries such as China could keep prices closer to $60 in 2026. A full unwinding of the 1.65 mbpd of OPEC+ cuts from April 2023, which would be additive to the ongoing 2.2 mbpd OPEC+ cut unwind, could drag prices below the bank’s baseline, potentially falling to $40 in a recession scenario by 2026.

“Reduced spare capacity increases our confidence that prices will rebound after 2026,” Goldman said.

It based its bullish long-term view on factors including falling investment, a lack of new non-OPEC projects beyond 2026, and growing demand over the next decade.

Goldman reiterated its cautious stance for 2026 and continues to recommend hedging against downside risk.

“We still recommend buying oil puts (or put spreads) and selling calls,” it said, suggesting investors sell a June 2026 $75 Brent call to fund buying a $55/45 put spread.

Source: Reuters