Goldman Says Oil Risks More Balanced, Keeps 2026 Price Forecasts Unchanged

Goldman Sachs said the oil market had moved into a more balanced risk setup, keeping its 2026 average Brent forecast at $83 a barrel and WTI at $78 after a sharp geopolitical swing in recent weeks. The bank’s message was simple but important: the threat from Middle East supply disruptions had not disappeared, but weaker demand and signs of faster supply normalization had begun to offset it.

That shift matters beyond trading screens. In plain terms, Goldman was saying oil no longer faces only one big risk, a sudden supply shock. It now faces two-sided pressure: prices could jump again if Gulf flows are disrupted, but they could also ease if production restarts faster than expected and global consumption stays soft. Goldman said near-term downside risk had increased if Persian Gulf flows recovered quickly, especially if shut-ins proved smaller than feared and regional storage helped exports resume.

The demand picture was the more troubling part of Goldman’s note. The bank said early-2026 demand losses appeared larger than the oil shocks seen in 2011 and 2022, with the weakest consumption concentrated in emerging markets in Asia and Africa, where fuel use is more sensitive to price. It also pointed to refined-product weakness, especially in petrochemical feedstocks and jet fuel, as high product prices and margins weighed on consumption. For Americans, that combination can matter at the pump and in the inflation data: softer crude demand can help restrain gasoline costs, while cheaper oil can ease some pressure on headline inflation, though volatile energy prices still complicate the Federal Reserve’s view of how sticky inflation really is.

The geopolitical backdrop remained severe. The Strait of Hormuz carries about 20% of the world’s oil and liquefied natural gas supplies, and the Dallas Fed has said a complete halt in Gulf exports would remove close to 20% of global oil supplies from the market, about 80% of it shipped to Asia. Goldman had warned earlier in April that Brent could stay above $100 a barrel through 2026 if the strait remained closed for another month, even after lifting its March 2026 Brent forecast to $85 and calling the disruption the largest supply shock ever seen in global crude.

Goldman’s more cautious tone also landed against a bleak demand backdrop from the International Energy Agency, which said global oil demand was expected to contract by 80,000 barrels a day in 2026 and projected a 1.5 million b/d second-quarter decline, the sharpest since Covid-19. The IEA said Middle East and feedstock-constrained refineries in Asia had cut runs by around 6 million b/d in April, to 77.2 million b/d, while refining margins surged as middle distillate cracks hit record highs. Together, those numbers suggest the oil market is no longer trading only on war risk; it is now wrestling with whether global consumption can absorb prices that remain elevated by historical standards.