Goldman Sachs significantly elevated its crude oil price forecasts for 2026 in response to mounting geopolitical tensions and supply disruption risks in the Middle East. The investment bank raised its 2026 average price forecast for Brent crude oil to $85 per barrel from a previous estimate of $77, while increasing its West Texas Intermediate (WTI) forecast to $79 per barrel from $72, according to reporting by EnergyNow on March 23, 2026. The upward revision reflects Goldman Sachs' expectations of extended disruptions to crude shipments through the Strait of Hormuz and increased strategic stockpiling by governments, which the bank believes will drive the market into a tighter and more risk-averse posture.
The bank's analysis suggests that heightened uncertainty surrounding the duration and severity of these supply disruptions is driving elevated risk premiums across the market. Goldman Sachs expects particularly acute price pressure in the near term, forecasting Brent to average $110 per barrel in March and April 2026, up substantially from a prior forecast of $98 per barrel for the same period. This represents a significant increase driven by traders attaching growing risk premiums amid escalating geopolitical concerns.
In a risk scenario analysis, Goldman Sachs outlined an extreme upside case where the price could reach $135 per barrel if the market required a sufficient risk premium to generate precautionary demand destruction offsetting supply destruction over a six-month period. This scenario assumes 10 weeks of very low flows through the Strait of Hormuz coupled with 2 million barrels per day of persistent production losses in Middle Eastern production. The bank identified two primary upside risk factors to its baseline forecasts.
The first involves a prolonged disruption to Hormuz shipping that could push Brent crude past its 2008 peak. The second risk factor centers on a sustained 2 million barrels per day supply loss in Middle Eastern production, which could trigger significant price spikes. Conversely, Goldman Sachs also noted downside scenarios that could pressure prices.
A potential end to U.S. military action in the region could rapidly erode the existing risk premium, while Washington's possible consideration of oil-export restrictions could widen the Brent-WTI price spread further. Looking beyond the near-term volatility, Goldman Sachs forecast that Brent and WTI prices will stabilize at $80 and $75 per barrel, respectively, through 2027. The bank's outlook assumes that the easing effect from price-driven supply and demand responses will roughly offset the tightening effect from countries rebuilding their strategic petroleum reserves.
At the time of the report's publication late on Sunday, March 23, 2026, Brent crude futures were trading down 8 cents at $112.11 per barrel, while U.S. West Texas Intermediate crude was down 6 cents at $98.17 per barrel as of 2324 GMT. The forecast revision coincided with heightened tensions in the Middle East.
Iran indicated on Sunday that it would strike the energy and water systems of its Gulf neighbors if U.S. President Donald Trump followed through on a threat delivered the previous day to target Iran's electricity grid within 48 hours. These geopolitical tensions underpin the elevated risk premium that Goldman Sachs incorporated into its revised price forecasts.
Source: EnergyNow.com, reporting by Noel John and Pablo Sinha in Bengaluru; editing by Christopher Cushing and Thomas Derpinghaus.
Source: energynow.com