Goldman Sachs raises Brent oil forecast for second half of 2025 to $66

Goldman Sachs has raised its H2 2025 Brent crude forecast by $5 to $66/bbl and WTI by $6 to $63/bbl, citing increased supply disruption risk, lower OECD inventories, and Russian production constraints, while maintaining unchanged 2026 forecasts. The bank anticipates OPEC+ unwinding 2.2 mbpd of cuts by September but highlights significant price volatility, with Brent potentially reaching $90 on supply shocks or falling to $40 in a 2026 recession scenario. Despite near-term caution and a recommendation to hedge 2026 downside risk via oil puts, Goldman holds a bullish long-term outlook post-2026, driven by underinvestment and growing demand.

Analysis

Goldman Sachs has adjusted its oil price forecast, raising its outlook for the second half of 2025 while signaling significant caution for 2026. The bank lifted its H2 2025 Brent crude forecast by $5 to $66 per barrel and its WTI forecast by $6 to $63 per barrel, citing supply disruption risks, lower OECD inventories, and Russian production constraints. In contrast, 2026 forecasts remain unchanged at $56 for Brent, reflecting an anticipated market surplus widening to 1.7 million barrels per day. The report highlights a wide range of potential outcomes, underscoring market volatility; a significant supply disruption, such as a drop in Iranian output, could push Brent to $90, whereas a full unwind of OPEC+ cuts combined with a recession could see prices fall to $40 by 2026. Despite the near-term caution and a specific recommendation to hedge 2026 downside risk via put options, Goldman maintains a bullish long-term view for post-2026, predicated on reduced spare capacity, falling investment in new non-OPEC projects, and growing demand.

Key Decisions for Investors

• Considering the forecast of a wider 2026 surplus and significant downside risk, investors should evaluate hedging long oil positions for that period, potentially using put spreads to protect against prices falling towards the $40-$55 range.
• The bullish long-term outlook post-2026, based on structural underinvestment, suggests that any significant price decline in 2026 could present a strategic entry point for investors with a longer time horizon.
• Closely monitor OPEC+ production decisions, as the pace of unwinding the 2.2 mbpd of cuts will be a primary driver of price volatility and will be critical in determining whether the market moves toward the projected surplus.