Brent crude may fall to USD 60s in 2027 if Gulf oil output recovers faster: Goldman Sachs
New Delhi, October 12
Brent crude oil prices could fall to the USD 60s per barrel in 2027 if oil production in the Persian Gulf recovers faster than expected, Goldman Sachs said in its latest report. However, the investment bank warned that further escalation in the region could push prices significantly higher.
Goldman Sachs said Brent prices could decline to the USD 60s if average oil output in the Gulf in 2027 rises by 1 million barrels per day above February 2026 levels.
"A faster recovery in Mideast output and/or a faster erosion of the risk premium are the most likely potential triggers of price downside," Goldman Sachs said.
The report said its main expectation remains that continued adjustments in Middle East oil supply would eventually bring crude prices down. However, renewed escalation in the region remains a significant risk that could push prices higher.
Goldman Sachs has raised its December 2026 Brent crude forecast to USD 90 per barrel from its earlier estimate of USD 85. It kept its average Brent price forecast for 2027 unchanged at USD 80 per barrel.
The bank said continuing risks to oil supply could slow the decline in the geopolitical risk premium, which it estimates at just over USD 20 per barrel.
Goldman Sachs estimated that Persian Gulf oil exports, including estimated unreported exports, had recently recovered to their 2025 average. It also estimated that the global oil market was roughly balanced in September.
Despite the recovery in exports, crude prices have remained high because of low oil inventories and concerns about possible supply disruptions. These factors are encouraging buyers to purchase physical oil for restocking and use financial markets to protect themselves against potential price increases.
The report also shared that including global oil inventories outside OECD commercial storage raised its estimate of Brent's fair value for September by USD 6 to USD 80 per barrel. It said these inventories had become useful indicators for assessing oil prices.
While faster supply recovery could bring prices down, Goldman Sachs warned that the risks to its oil price forecasts remained tilted towards the upside, particularly in the near term.
"Brent might average around USD 125/bbl in 2027 if 2027 average Gulf output remains 5mb/d below Feb26 levels, versus 0.3mb/d below in our base case," the bank said.
It identified damage to oil infrastructure, intensified shipping attacks and a more persistent risk premium as potential triggers for higher prices.
The report highlights how the pace of oil supply recovery in the Middle East could determine the direction of crude prices in 2027, with faster production recovery potentially bringing prices down while prolonged disruptions could keep them elevated.
— ANI
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