Goldman Sachs revised down its medium-term oil price projections after President Trump announced an interim deal that will lift the U.S. blockade and reopen the Strait of Hormuz following a scheduled signing on Friday. The bank now expects Persian Gulf exports to normalize to pre-war levels by the end of July, one month earlier than its previous assumption of end-August.
In concrete terms, Goldman reduced its forecast for Brent crude in the fourth quarter of 2026 to $80 a barrel from $90, and it cut its average Brent outlook for 2027 to $75 from $80. For U.S. benchmark WTI, the bank now expects an average of $75 in the fourth quarter of 2026 and $70 in 2027.
Goldman said that simply moving the timeline for supply normalization forward by one month lowers the fair value of crude by roughly $10 a barrel for the fourth quarter of 2026 and by about $5 a barrel for 2027.
Analysts' perspective
The bank's strategy team, which includes Daan Struyven, described the outlook for supply recovery as "two-sided." They highlighted several factors that could support higher flows and push the market tighter. Among these, Gulf flows have already risen to an estimated 11 million barrels per day, and getting to pre-war export levels would require what the strategists described as just a 12 million barrel-per-day increase in Hormuz flows to reach 70% of pre-war volumes.
Goldman also noted the potential for stronger responses by Saudi Arabia and the UAE to replenish low OECD commercial stocks, and for Iranian output to rise further if sanctions relief materializes.
Downside and operational risks
The strategists cautioned that the recovery assumption is not guaranteed. A resumption of regional hostilities or strikes on tankers "might keep shippers risk-averse," they said. They also pointed to the possibility that mine clearance could take substantial time, and warned Iran could move to close the Strait again if broader nuclear talks fail.
On balance, Goldman still sees risks to its price forecast as tilted toward the upside. In an upside scenario in which Hormuz remains disrupted through 2027, the bank estimated Brent could top $130 in late 2026 and average $105 in 2027. Conversely, in a downside scenario featuring an earlier export recovery combined with stickier demand losses and stronger supply, Brent could average just under $70 in the fourth quarter of 2026 and fall below $60 in 2027.
Inventory and structural dynamics
Despite anticipating a 3.2 million barrel-per-day surplus in 2027, Goldman expects Brent and WTI to remain close to long-run fair values of $75 and $70, respectively. The bank points to limited scope for additional stock builds following substantial first-half draws, and to a structural trend of strategic stockpiling expected to exceed 1 million barrels per day next year. "Some security premium compensating for disruption risk is likely to keep a floor under prices," the strategists wrote.
These dynamics mean that even with a projected surplus, price support may persist as market participants weigh disruption risks and ongoing strategic inventory decisions.
Implications
The revisions alter the bank's risk-reward calculations for late 2026 and 2027 and reflect how a shorter-than-expected period of Gulf export disruption can materially change fair-value estimates. Energy market participants, shipping firms, oil producers and commodity traders are all implicated by these adjustments, which hinge on both the progress of physical flows through the Strait and the political trajectory of broader regional negotiations.