Oil Analyst Ongoing Disruptions, More Adaptation Nudging Up Our Price Forecast

Commodities Research 7 September 2026 | 7:08PM EDT

Ongoing Disruptions, More Adaptation: Nudging Up Our Price Forecast

n We raise our Brent/WTI price forecasts by $5 to $85/80 for Dec2026 and to Daan Struyven | $80/75 for 2027, reflecting our new assumption that Mideast shipping Goldman Sachs & Co. LLC disruptions continue into 2027. Yulia Zhestkova Grigsby | n The price upgrade is modest despite the assumption that shipping disruptions Goldman Sachs & Co. LLC continue for two reasons: Alexandra Paulus | o OECD commercial land inventories—a key price driver—have so far barely Goldman Sachs & Co. LLC drawn since the war began, reflecting a smaller-than-expected deficit amid market adaptation, and the concentration of stocks draws in OECD Filippo Cuscito | SPR, on water, and in China. Goldman Sachs International

o We assume Mideast supply adaptation continues, with production gradually recovering by 2027H2 as (dark) flows edge up further and pipelines come online in late 2027. n Low visible global oil stocks and OECD SPR levels do not necessarily imply an imminent crude price spike, assuming Middle East supply continues to recover, for three reasons: o History. When visible global stocks hit their all time low in November 2024 (in a sample starting in 2017), Brent was $76. Today, OECD commercial stocks measured in days of demand—a better price predictor—remain 16% above their 2003 average (the all time low). o Not running out. We estimate that global landed oil stocks have declined from 9.1 billion barrels before the war to 8.6 billion barrels today, still well above minimum operational storage level estimates. o China. Price-sensitive Chinese crude imports are likely to moderate price upside. n Risks to our price forecast remain significantly tilted to the upside on net, especially near-term. o Price upside scenario: Brent might exceed $120/bbl if 2027 average Gulf output remains 4mb/d below pre-war levels, versus 0.5mb/d below in our base case. Intensified Hormuz and Red Sea shipping attacks are the most likely trigger of price upside. o Price downside scenario: Brent might decline into the $60s in 2027 if 2027 average Gulf output rises 1mb/d above pre-war levels.

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n We still recommend hedging geopolitical risk through deferred Mar27-Dec27 European diesel timespreads, which would rise over 100% if persistent Russia or Mideast refinery outages keep the nearby 9-month spread near current levels.

We Estimate That the Global Market Deficit Narrowed From About 7mb/d in March 2026 to 1mb/d in 2026Q3 as Gulf Output Partially Recovered, Demand Remained Soft, and ex-Gulf Production Grew

Source: Goldman Sachs Global Investment Research

Downside Risk to Gulf Supply Means Significant Net Upside Risk to Our $80 Brent 2027 Average Forecast mb/d Persian Gulf Oil Production mb/d $/bbl Estimated Brent Spot Price $/bbl

Price Downside (2027 Gulf Supply 1mb/d Above Pre-War) Price Upside (2027 Gulf Supply 4mb/d Below Pre-War) Base Case (2027 Gulf Supply 0.5mb/d Below Pre-War) Base Case (2027 Gulf Supply 0.5mb/d Below Pre-War) Price Upside (2027 Gulf Supply 4mb/d Below Pre-War) Price Downside (2027 Gulf Supply 1mb/d Above Pre-War) Forwards

16 16 60 60 Jan-26 Apr-26 Jul-26 Oct-26 Jan-27 Apr-27 Jul-27 Oct-27 Jan-26 Apr-26 Jul-26 Oct-26 Jan-27 Apr-27 Jul-27 Oct-27

Source: Goldman Sachs Global Investment Research