Oil prices are expected to come under renewed pressure in 2026 as accelerating supply growth leaves the market increasingly oversupplied, according to analysts at Goldman Sachs. The bank believes the dynamic that dominated 2025 will largely persist, with plentiful production offsetting geopolitical risks and limiting any sustained upside in prices.
Brent crude declined 14% year on year in 2025, despite periodic rallies linked to geopolitical flare-ups — a pattern Goldman strategists say is likely to repeat.
The team led by Daan Struyven forecasts average prices of $56 per barrel for Brent and $52 for WTI in 2026, well below current forward curves of roughly $62 and $58. The outlook reflects what the bank describes as a continuing supply wave, resulting in a surplus of about 2.3 million barrels per day.
Rising global stockpiles point to mounting imbalance, with strategists arguing that “rebalancing the market likely requires lower oil prices in 2026,” unless there are major supply disruptions or new production cuts from OPEC.
Goldman’s base-case scenario assumes no additional OPEC cuts next year, noting that the production increases seen in 2025 were deliberate and that recent price weakness reflects temporary supply strength rather than faltering demand.
The bank expects prices to soften as the year progresses, with Brent and WTI reaching lows of around $54 and $50 per barrel, respectively, in the fourth quarter of 2026. This is as inventory builds accelerate in OECD commercial storage facilities. Analysts added that onshore inventory accumulation is becoming more price-relevant, as oil stored at sea is already elevated and starting to stabilise.
Robust supply remains central to the bearish outlook. Strategists highlight continued production outperformance in the United States and Russia, along with “slightly higher Venezuela production,” as factors weighing on longer-dated prices and reinforcing downward pressure along the forward curve.
As a result, Goldman has lowered its three-year forward fair value estimate for Brent by $5 to $64 and cut its 2027 average price forecasts by the same margin. The bank now expects Brent and WTI to average $58 and $54, respectively, in 2027, as elevated supply delays a full market rebalancing.
Although geopolitical risks remain elevated, the bank sees them as drivers of volatility rather than catalysts for a lasting price rally. “While threats to sanctioned supply could create price spikes,” strategists said, policymakers’ preference for ample energy supply and relatively low oil prices is likely to cap gains, particularly ahead of U.S. midterm elections.
Overall, risks to the outlook are viewed as broadly balanced but tilted modestly to the downside.
Looking beyond 2026, Goldman expects prices to recover gradually from 2027 as non-OPEC supply growth slows and demand remains resilient. Even so, the bank has tempered its long-term expectations, trimming its Brent and WTI forecasts for 2030–2035 to $75 and $71 per barrel, while maintaining that a longer-term recovery will still be required to incentivise investment following years of subdued long-cycle spending.