Goldman Sachs has raised its oil price outlook for the fourth quarter of 2026, citing a combination of firmer pricing dynamics and weaker-than-anticipated builds in Organisation for Economic Co-operation and Development (OECD) commercial inventories.
The bank increased its Q4 2026 Brent estimate by $6 to $60 per barrel and lifted its corresponding West Texas Intermediate (WTI) forecast by $6 to $56 per barrel. The revision accompanies a backdrop in which Brent futures rallied to about $71, a move Goldman attributes to Iran-related supply concerns that have boosted market positioning and an associated risk premium.
Goldman strategists, led by Daan Struyven, pointed to two related factors behind the change in near-term price assumptions: January supply disruptions and an uneven distribution of the global surplus. Much of the surplus, they say, appears to be accumulating as sanctioned crude that is effectively "stuck at sea," rather than being recorded in OECD commercial storage.
Although the bank retained its forecast for a global oil surplus of 2.3 million barrels per day in 2026, it altered its expectations for where that surplus will be held. Goldman now assumes that just 19% of global inventory builds will be captured in OECD commercial stocks, down from a previous assumption of 27%. By contrast, about 25% of the surplus is now expected to be parked as crude from Russia and Iran on floating storage, reflecting ongoing demand shortfalls for sanctioned barrels.
Goldman notes that when these floating barrels are excluded from the calculation, the effective surplus would contract to 1.7 million barrels per day. The bank maintained its view that supply growth will outpace demand in 2026, assuming no major supply disruptions and no peace in the Russia-Ukraine conflict. It also characterized January disruptions in Kazakhstan and Venezuela as mostly temporary.
Looking beyond 2026, Goldman expects the market to tighten and prices to rise as rebalancing occurs. The firm forecasts Brent and WTI averages of $65 and $61, respectively, for 2027, and projects year-end 2027 prices of $70 for Brent and $66 for WTI, citing solid demand growth and a slowdown in non-OPEC supply growth.
Geopolitical developments remain a critical swing factor for the outlook. Goldman described risks to its baseline as two-sided but skewed to the upside. As an illustrative scenario, the strategists said a disruption removing about 1 million barrels per day of Iranian supply could push Brent to around $68 in late 2026.
Context and implications
- Near-term pricing has been influenced both by supply disruptions early in the year and by the location of surplus crude, with a notable portion kept offshore as sanctioned cargoes.
- Goldman maintained its broad supply-demand balance view for 2026 but altered the expected distribution of surplus inventories, which has direct implications for market tightness and price formation.
This update highlights how inventory location and geopolitical risk premiums can meaningfully shift price forecasts even when aggregate supply-demand balances remain unchanged.