Daijiworld Media Network - New Delhi
New Delhi, Oct 12: International crude oil benchmark Brent crude is expected to reach $90 per barrel in December 2026, up around 6 per cent from the earlier forecast of $85, as supply-side risks arising from the West Asia conflict continue to support a significant risk premium, according to a report by Goldman Sachs.
The upward revision to the December 2026 forecast reflects “ongoing downside risks to supply likely to slow the moderation in the time spreads risk premium — which we estimate at just over $20 today,” the investment bank said in its report.
However, the revised forecast remains nearly 13 per cent below the current price of around $103 per barrel. Goldman Sachs has also retained its forecast for Brent crude to average $80 per barrel in 2027.
The bank's estimates take into account potential supply disruptions, low inventories and the sensitivity of oil prices to interest rates, which are supporting physical restocking and financial hedging.
“Our 2027 average Brent forecast of $80 per barrel is unchanged and balances downward price pressure from faster-than-expected adaptation in Gulf supply against a slower moderation in the risk premium,” Goldman Sachs said.
The report also projected that West Texas Intermediate (WTI) crude could average $81 per barrel in December 2026 and $73 per barrel in 2027. The estimates reflect unusually wide price spreads between WTI and Brent, driven by high shipping costs from the United States to Europe.
When the West Asia conflict began in late February, Brent crude was trading at around $70 per barrel. Prices subsequently surged to more than $125 per barrel as shipping through the Strait of Hormuz was disrupted. The strategic waterway accounts for nearly 20 per cent of global oil shipments.
A gradual reopening of shipping routes led to a moderation in crude prices towards pre-war levels, before prices climbed again to test the $100-per-barrel mark.
Goldman Sachs warned that Brent crude could average around $125 per barrel in 2027 if average Gulf oil production that year remains five million barrels per day below February 2026 levels, compared with a shortfall of 0.3 million barrels per day assumed in its base-case forecast.
The report identified damage to oil infrastructure, intensified attacks on shipping and a more persistent risk premium as the key potential triggers for a further rise in crude prices.