On Thursday, June 11, investment bank Goldman Sachs Group lowered its 2027 Brent crude oil price forecast to $80 per barrel, citing strong supply growth and continued weak demand. The bank also warned of potential severe price fluctuations due to geopolitical risks.
Goldman Sachs emphasized that oil production in the United States, Brazil, Guyana, Venezuela, and the United Arab Emirates has been steadily increasing, while global structural demand is changing, especially in China. Analysts in the report predicted that with China accelerating its energy transition, its oil demand is expected to decrease by more than 10% from previous expectations, and the soft trend is likely to continue.
Recent data shows a continuous decline in oil demand in China, with sales volume at China’s largest refining company, Sinopec, also decreasing. This decline may be related to the oil price surge driven by the Middle East crisis, but analysts, including those at Goldman Sachs, speculate that the reduced demand in China has become a “long-term trend.”
However, some analysts believe that the decrease in Chinese oil demand is closely related to the ongoing economic downturn, deflationary pressures, and weak domestic supply and demand situation.
In addition, Goldman Sachs expects the average price of Brent crude in the fourth quarter of 2026 (October to December) to be around $90 per barrel and noted that the impact of the long-term interruption in the Hormuz Strait has been offset by lower-than-expected supply shortages.
Goldman Sachs explained that while the initial Hormuz Strait interruption led to a significant drop in liquid oil production in the Middle East, the impact of the oil shortage has been greatly reduced due to weak global demand and the previously oversupplied market environment. Currently, the global oil supply gap in the second quarter (April to June) is relatively limited, estimated at about 5 to 6 million barrels per day.
The bank stated, “We currently assume that the crude oil exports of Gulf countries in the Persian Gulf will return to normal by the end of August (previously predicted by the end of June), considering the current situation of route diversion, the flow rate of the Hormuz Strait may return to 70% of pre-war levels.”
Goldman Sachs also emphasized the upside risk to oil prices. If the export disruption continues for a longer period, the average price of Brent crude by the end of 2026 could rise to $110 per barrel; in the worst-case scenario, if the Hormuz Strait remains disrupted until 2027, oil prices could soar to $140 per barrel.
On the other hand, if supply can recover faster and demand remains weak, the end-of-2026 oil price could dip to $70 per barrel, and by 2027, it might fall to around $60 per barrel. At that time, the oil supply from the United States, Guyana, the UAE, Brazil, and Venezuela will be sufficient to meet global market demand.
(Reference: Reuters)