Goldman Sachs lifts Brent oil outlook to $105 on war risks
Goldman Sachs now projects Brent crude will climb to $105 a barrel by December, up sharply from an earlier $90 call, pointing to ongoing conflict risk tied to the Middle East and the Russia-Ukraine war.
Alongside the Brent revision, the bank increased its December outlook for WTI crude to $94 a barrel. Looking further out, Goldman’s updated 2027 average projections stand at $88 for Brent and $78 for WTI, compared with earlier figures of $80 and $73. The research note carried the name of strategist Daan Struyven.
According to Goldman, the core driver of the update is a shift in methodology rather than a single event. Its baseline scenario now permanently factors in a cushion equal to one million barrels per day of global supply loss through 2027, reflecting how hard it is to pinpoint when and where outages might strike. The bank pointed to ongoing hostilities tied to the Middle East and the Russia-Ukraine war, combined with broader splintering of geopolitical alignments, as justification for keeping disruption risk elevated over the long term. It further observed that traders are now building a larger cushion into prices, since few expect a lasting diplomatic settlement anytime soon.
This represents a notable about-face from Goldman’s position in mid-October, when analysts argued that Gulf supply would gradually stabilize and eventually drag prices down, with renewed conflict flagged only as a secondary risk. Back then, the bank’s December Brent call was $90, its 2027 average sat at $80, and it calculated that roughly $25 a barrel of the spot price reflected risk premium. Goldman had also pointed out that global oil consumption had fallen 3.3 million barrels per day year-over-year in the third quarter.
The updated forecast follows a weekend marked by fresh supply threats, among them renewed Ukrainian drone attacks targeting Russian refineries and reports that multiple ships were hit or damaged near Gulf waters, including the Strait of Hormuz and the Gulf of Oman.
Upward revisions to oil price forecasts can ripple into inflation projections and central-bank rate expectations, and have generally weighed on gold throughout the current period of conflict. A persistent risk premium embedded in Brent and WTI pricing also tends to benefit energy stocks and the currencies of oil-producing nations.
Source: investingLive