Goldman Sachs forecasts that Brent Crude oil prices will average $76 per barrel in 2025, slightly lower than the expected $80 per barrel average in 2024. This decline is due to an anticipated market surplus, the investment bank said.
In a recent report, Goldman Sachs analysts noted that their base case for 2025 suggests that Brent will remain within a range of $70 to $85 per barrel. They explained that high spare production capacity would limit price increases, while the price sensitivity of OPEC and shale producers would prevent significant price declines. However, they also acknowledged that the risks of a price breakout, in either direction, are growing.
Looking ahead, Goldman Sachs expects a surplus of 400,000 barrels per day (bpd) in the global oil market in 2025, which could expand to 900,000 bpd by 2026. As a result, the bank predicts that Brent prices will average $71 per barrel in 2026.
The 2025 price forecast remains unchanged from the bank’s previous projection, made last month. Goldman Sachs has highlighted that with ample oil supply and excess production capacity, there is limited room for significant price increases in the coming year.
Despite the overall market balance, Goldman Sachs sees potential for an upside risk to oil prices in the near term. If the U.S. government imposes stricter sanctions on Iran’s oil industry and exports, this could push prices higher. In particular, if these sanctions were to significantly reduce Iran’s oil supply by approximately 1 million bpd, Brent prices could surge to the mid-$80s in the early months of 2025, particularly if Donald Trump returns to the U.S. presidency.
On Friday morning, Brent Crude prices were up 0.4%, trading at $74.57 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 0.36% to $70.40 per barrel. These gains come amid renewed tensions between Ukraine and Russia.
Oil prices are set to post a weekly gain, following Russia’s launch of a new type of ballistic missile at Ukraine. The missile, a hypersonic medium-range weapon, marks an escalation in the ongoing conflict. The strike was in response to a Ukrainian attack on Russian territory using U.S. and British-supplied ATACMS missiles.
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