Goldman Sachs has reduced its projections for oil prices in the second quarter of 2026 following the announcement of a two-week ceasefire agreement between the United States and Iran. In a note released late Wednesday, the bank lowered its expected averages for Brent crude to $90 per barrel and U.S. crude to $87 per barrel.
The revised outlook marks a step down from Goldman’s earlier estimates, which had placed Brent at an average of $99 per barrel and West Texas Intermediate (WTI) at $91 per barrel during the same period.
“Given the reduction in the risk premium at the front of the curve and already edging up oil flows through the SoH (Strait of Hormuz), we nudge down our Q2 forecast for Brent/WTI,” the bank said in a note.
Oil markets have been volatile in response to the geopolitical developments. Brent prices have fallen more than 11% this week amid expectations that shipping through the Strait of Hormuz could resume after U.S. President Donald Trump agreed to the temporary ceasefire with Iran.
Despite the earlier decline, crude prices moved higher again on Thursday as traders weighed the possibility that supply from the Middle East might not fully recover. Concerns remain about the durability of the ceasefire and the continued restrictions affecting the strategically vital waterway.
Goldman Sachs left its forecasts for the remainder of the year unchanged, projecting third-quarter averages of $82 per barrel for Brent and $77 for WTI. For the fourth quarter, the bank expects Brent to average $80 per barrel and WTI around $75.
Even with the lowered short-term outlook, the bank noted that risks to its forecasts remain tilted to the upside, largely due to the possibility of prolonged supply disruptions or deeper production losses.
In a more extreme scenario where the ceasefire fails and Middle Eastern output declines by roughly 2 million barrels per day, Goldman suggested that Brent could average close to $115 per barrel in the fourth quarter.
The bank also adjusted its outlook for European natural gas prices. Goldman lowered its forecast for the benchmark Dutch TTF contract in the second quarter to €50 per megawatt-hour, down from a previous estimate of €70 per MWh, assuming liquefied natural gas flows through the Strait of Hormuz gradually normalise from mid-April.
However, Goldman warned that if LNG shipments face prolonged delays or if production infrastructure suffers damage, prices could rise sharply. In that scenario, the bank said gas prices would likely exceed €75 per megawatt-hour.