Goldman Sachs Raises H2 Brent Oil Forecast Amid Supply Disruption Risks

Goldman Sachs has raised its H2 Brent oil forecast, citing the risk of supply disruption due to lower oil inventories among OECD countries, a rapid decline in perceived spare capacity, and concerns about Russian production. The market shift from recession worries to supply disruptions has contributed to this revised forecast.

Goldman Sachs has revised its forecast for the second half of 2025, raising its estimate for Brent crude oil prices due to potential supply disruptions. The bank cited several factors, including lower oil inventories among OECD countries, a rapid decline in perceived spare capacity, and concerns about Russian production constraints. These factors have shifted the market's focus from recession worries to supply disruptions, leading to the updated forecast.

The bank now 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. For 2026, the forecasts remain unchanged at $56 for Brent and $52 for WTI, reflecting an offset between a boost from higher long-dated prices and a hit from a wider 1.7 million barrels per day surplus [1].

Goldman Sachs anticipates that OPEC+ will unwind 2.2 million barrels per day of production cuts by September, including a final 0.55 million barrels per day increase. The bank also noted that a drop in Iranian supply could push Brent prices 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 million barrels per day of OPEC+ cuts from April 2023 could drag prices below the bank's baseline, potentially falling to $40 in a recession scenario by 2026 [2].

The bank's more bullish long-term outlook is based on factors including falling investment, a lack of new non-OPEC projects beyond 2026, and growing demand over the next decade. Goldman Sachs reiterated its cautious stance for 2026 and continues to recommend hedging against downside risk, suggesting investors sell a June 2026 $75 Brent call to fund buying a $55/45 put spread.

References:
[1] https://uk.finance.yahoo.com/news/goldman-sachs-raises-brent-oil-183236284.html
[2] https://seekingalpha.com/news/4467292-goldman-sachs-raises-h2-brent-oil-forecast-citing-risk-of-supply-disruption