Goldman Sachs has revised its oil price forecast for 2027, projecting lower prices due to anticipated stronger supply and weaker demand. The investment bank now expects Brent crude oil to average around $80 per barrel next year. This adjustment reflects increased production from major non-OPEC countries and a shift in China’s energy consumption away from oil.
Analysts at Goldman Sachs highlighted that China’s demand for crude oil is showing signs of decline, partly driven by the country’s growing adoption of alternatives such as electric vehicles and rail transport. The bank estimates that gasoline and related product consumption in China fell by as much as 20% year-on-year in April. This trend is expected to continue, contributing to a persistent reduction in global oil demand.
On the supply side, Goldman Sachs anticipates a normalization of oil exports from Gulf producers by late August, a delay from the previous expectation of late June. This outlook assumes that flows through the Strait of Hormuz will recover to about 70% of pre-conflict levels due to current rerouting efforts. Should the strait reopen later than expected, the bank warns that Brent crude prices could remain elevated, potentially exceeding $110 per barrel towards the end of this year.
In a more severe scenario where the Strait of Hormuz remains closed until the end of 2026, Goldman Sachs projects Brent crude could start 2027 at around $140 per barrel. Conversely, if the strait reopens sooner, prices might fall to approximately $70 per barrel by year-end and further drop to $60 per barrel in 2027. This lower price environment would be supported by increased supply from countries including the United States, Guyana, the United Arab Emirates, Brazil, and Venezuela.
The forecast adjustment underscores ongoing uncertainties in the global oil market. While supply is strengthening due to expanded production capacity outside OPEC, shifting consumption patterns—particularly in China—pose significant risks to demand. The geopolitical situation in the Middle East remains a critical factor influencing price volatility.
Goldman Sachs’ revised outlook reflects a cautious stance amid these mixed signals. The firm’s analysts emphasize that market dynamics will depend heavily on developments in key regions such as the Gulf and China’s energy policies. The balance between supply recovery and demand shifts will be crucial in determining oil prices over the coming year.
As global energy markets continue to evolve with technological advances and geopolitical tensions, investors and policymakers will closely monitor these factors. The interplay between supply disruptions and changing consumer behavior is shaping a complex environment for oil prices heading into 2027.
