The bank slashed its Brent crude forecast by $10 per barrel as Iran tensions ease and non-OPEC supply surges
Goldman Sachs has cut its fourth-quarter 2026 Brent crude forecast to $80 per barrel, down from $90, as the bank anticipates a flood of supply returning to a market that spent the first half of the year pricing in wartime scarcity.
The catalyst is straightforward: a new US-Iran interim agreement aimed at normalizing relations, the reopening of the Strait of Hormuz, and a growing wave of non-OPEC production that shows no signs of slowing down.
The numbers behind the downgrade
Goldman’s revised outlook doesn’t stop at Q4 2026. The bank’s 2027 average forecast has also been pulled down to $80 per barrel, with some internal analyses suggesting prices could dip as low as $75.
The Strait of Hormuz normally handles about 20% of global oil supply. Now Goldman expects those flows to recover, though the bank sees throughput reaching only about 70% of pre-war levels. Alternative transport routes developed during the disruption can now handle roughly 7.5 million barrels per day, effectively reducing the world’s dependence on a single maritime bottleneck.
Persian Gulf exports are expected to normalize to pre-war levels by late July 2026, about a month earlier than previous estimates. Full production recovery is projected by October 2026.
A wall of non-OPEC supply
Non-OPEC production growth is coming from the United States, Brazil, Guyana, Venezuela, and the UAE. When combined with diminishing demand from China, the supply picture shifts substantially toward oversupply.
Fitch Ratings forecasts the global oil market will return to oversupply by September 2026, with the surplus ballooning to approximately 4 million barrels per day by Q4 2026. That estimate depends heavily on OPEC’s production policies and assumes that oil infrastructure in the Gulf region remains largely intact through the recovery period.
What this means for investors
Earlier in 2026, Goldman had increased its oil price forecasts multiple times as the Strait of Hormuz situation deteriorated. The peak projection of $90 for Q4 2026 reflected genuine supply-side anxiety. The swift progress toward resolving the conflict has essentially pulled the rug out from under that trade.
For energy sector investors, a stabilization around $80 per barrel is high enough to keep most US shale producers profitable, but it is well below the levels that justify aggressive new drilling programs or premium valuations for exploration companies. Pure-play producers who need $85-plus to generate attractive returns face a more difficult environment than majors with diversified operations.
Goldman’s 70% flow recovery estimate for the Strait of Hormuz leaves meaningful upside risk if actual recovery overshoots, which would add even more supply to an already glutted market. Conversely, any setback in the US-Iran agreement could quickly reverse the entire thesis and send crude back toward $90.
Written by: Editorial Team @CryptoBriefing
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