Brent crude at $60 or $125 in 2027? Goldman Sachs flags Gulf oil supply as key trigger

Global crude oil prices could slide into the $60-per-barrel range in 2027 if oil production in the Persian Gulf recovers faster than expected, Goldman Sachs said in its latest report. However, escalating geopolitical tensions, damage to energy infrastructure and disruptions to shipping routes could push prices sharply higher, underscoring the uncertainty surrounding the global oil market.

The investment bank said Brent crude could fall to the $60s per barrel if average oil production in the Gulf in 2027 rises by 1 million barrels per day above February 2026 levels.

“A faster recovery in Mideast output and/or a faster erosion of the risk premium are the most likely potential triggers of price downside,” Goldman Sachs said.

The bank’s outlook highlights how the pace of the Middle East’s oil supply recovery could shape global energy prices next year, with implications for inflation, fuel costs and oil-importing economies such as India.

Goldman Sachs raises December 2026 Brent forecast

Despite the possibility of a price correction in 2027, Goldman Sachs has raised its December 2026 Brent crude forecast to $90 per barrel from its earlier estimate of $85 per barrel.

The bank has retained its average Brent crude price forecast for 2027 at $80 per barrel, reflecting expectations that supply disruptions will gradually ease, even as geopolitical risks persist.

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Goldman Sachs estimates that the geopolitical risk premium embedded in crude prices remains slightly above $20 per barrel. Continued uncertainty over oil supplies could slow the erosion of this premium and keep prices elevated for longer than expected.

The bank also warned that the risks to its forecasts remain tilted towards higher prices, particularly in the near term.

Brent could surge to $125 if Gulf output remains disrupted

In a more severe scenario, Brent crude could average around $125 per barrel in 2027 if average Gulf oil production remains 5 million barrels per day below February 2026 levels, compared with a shortfall of 0.3 million barrels per day under the bank’s base-case scenario.

Goldman Sachs identified further damage to oil infrastructure, intensified attacks on shipping and a prolonged geopolitical risk premium as potential triggers for a sharp increase in prices.

Such a scenario would represent a significant departure from the bank’s central forecast and underline the vulnerability of global energy markets to prolonged disruptions in the Persian Gulf.

Why crude prices remain elevated despite recovering exports

Goldman Sachs estimated that Persian Gulf oil exports, including estimated unreported shipments, had recently recovered to their 2025 average. The bank also assessed that the global oil market was roughly balanced in September.

However, crude prices have remained elevated because of low oil inventories and persistent concerns about potential supply disruptions.

These risks have encouraged buyers to purchase physical oil to replenish stocks while using financial markets to hedge against possible price increases.

The bank said incorporating global oil inventories beyond OECD commercial storage raised its estimate of Brent crude’s fair value for September by $6 to $80 per barrel. It noted that these broader inventory measures had become increasingly useful indicators for assessing oil prices.

Ultimately, the outlook for 2027 will depend on whether Middle Eastern oil production normalises faster than expected or geopolitical tensions continue to restrict supply. A quicker recovery could ease prices towards the $60s, while prolonged disruptions could keep crude prices elevated or push them towards $125 per barrel.

For major oil-importing countries, the difference between these scenarios could have significant implications for import bills, inflation and economic growth.