Goldman Sachs flips on oil-price forecasts and says $120 Brent could be next.

By Jules Rimmer

After revising oil price targets down in summer, Goldman Sachs has been obliged to raise them again

If supply from the Persian Gulf remains disrupted then Goldman Sachs can see a path to $120 crude

In the span of just three months, Goldman Sachs analysts have gone from lowering their oil-price forecasts to hiking them.

The reduction came after the memorandum of understanding between the U.S. and Iran, but now with no sign of a let-up in Strait of Hormuz hostilities, commodities research head Daan Struyven is obliged to reverse direction and lift his price assumptions.

The warning is clear: "Brent (BRN00) might exceed $120 per barrel if 2027 average Gulf output remains 4 million barrels per day below pre-war levels." Intensified attacks on shipping would be the obvious upside catalyst.

The warning also stands in stark contrast to the predictions made by President Donald Trump on Monday, when in a social-media post he said oil prices will drop precipitously and that gasoline prices, averaging $4.15 per gallon nationally, would fall first to $3 and then ultimately $2.

In a piece published Monday, Struyven and his team raised their year-end forecast from $80 per barrel to $90 and the average for 2027 from $75 to $80.

Back in the summer, hopes for a cessation in violence, some sort of compromise agreement between the warring parties and a normalization in Middle East supplies was the message Goldman Sachs was transmitting. Even then, though, Struyven's phrasing suggested a sense of unease with mentions of "net upside risks still," "risks around Middle East supply" and "resilient demand" cropping up, even as Struyven was lowering his price target.

Monday's note inverts that trend. On this occasion, Struyven is hiking his targets but providing justification as to why the increases are relatively modest despite turbulence in the Persian Gulf.

Struyven points to two factors, limiting the extent of his adjustments: first, commercial land inventories in those economies in the Organization for Economic Co-operation and Development have barely reduced since the war began; second, Struyven anticipates ongoing supply adaptation with so-called "dark" or unrecorded flows through the strait and the redirecting of pipelines.

Goldman assumes Mideast supply adaptation continues with production gradually recovering

Struyven acknowledges some of the more alarmist calls on oil are probably overstated. OECD commercial stocks are 16% above the all-time low set in 2003, global landed oil stocks have declined from 9.1 billion barrels to 8.6 billion (still comfortably in excess of operational storage minimums) and Chinese crude imports are very price-sensitive.

In Tuesday trading, the price of Brent (BRN00) was 2% stronger at $99, its highest since July 23.

-Jules Rimmer

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09-08-26 0502ET