Goldman Sachs warns oil glut will deepen despite inventory rebuilding
Goldman cut its 2027 Brent view to $80 a barrel and sees the surplus widening to 3 million barrels a day, a warning that hits energy desks first.
Goldman Sachs is warning that rebuilding inventories will not stop the oil market from sliding into a larger glut in 2027. On June 12, the bank cut its average Brent forecast for 2027 to about $80 a barrel, while still expecting Brent to average roughly $90 in the fourth quarter of 2026.
Goldman now sees the global market swinging back into oversupply as the shock from the Iran war fades and traffic through the Strait of Hormuz recovers. Rising output from the United States, Brazil, Guyana, Venezuela and the UAE underpins the supply outlook, while structural demand weakness remains especially pronounced in China. Goldman earlier saw about a 2 million barrels a day oversupply through 2026; the surplus could widen to about 3 million barrels a day next year.
Brent fell close to 40% in the second quarter of 2026, the steepest quarterly drop since 2020. That changes how clients think about forward curves, storage and the timing of hedges. Energy bankers are likely to feel the effect as well, because a lower price path can slow the urgency around upstream spending, push producers to defend cash flow instead of expanding, and make buyers more selective on asset sales and acquisitions. That can mean fewer aggressive financing windows and a tougher pitch for sector hiring when firms tighten budgets before the glut fully hits.
Goldman cut its late-2026 and 2027 Brent views again after faster-than-expected normalization of Gulf exports tied to a U.S.-Iran deal, and it has warned that different geopolitical paths could still swing prices sharply higher or lower. Goldman outlined one scenario pointing to Brent near $70 in late 2026 or $60 in 2027 if supply normalizes faster and demand softens further, while prolonged disruption could keep prices much higher.
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