The global oil market outlook for 2026 is turning increasingly bearish as supply growth continues to outpace demand, according to the latest assessment from Goldman Sachs. The Wall Street bank expects the market to move into a deeper surplus, limiting the potential for a sustained recovery in oil prices even as geopolitical risks remain elevated.
Goldman Sachs notes that a pattern similar to 2025 is likely to persist, with geopolitical shocks generating short-term volatility rather than reversing the broader downward trend in prices.
In 2025, Brent crude prices fell by approximately 14% year-on-year, despite multiple price spikes triggered by geopolitical tensions in the Middle East, Eastern Europe, and South America. According to Goldman Sachs, this performance highlights how abundant supply has consistently outweighed the impact of geopolitical risks.
The bank’s strategists expect this dynamic to continue into 2026, as global production remains elevated and no meaningful supply tightening is anticipated.
Goldman Sachs’ commodities research team, led by Daan Struyven, forecasts that both Brent and WTI crude prices will average significantly below current forward levels in 2026.
Specifically, Brent crude is projected to average around USD 56 per barrel, while WTI is expected to average approximately USD 52 per barrel. These estimates compare with current futures prices of roughly USD 62 for Brent and USD 58 for WTI.
The primary driver behind the downward revision is an estimated global supply surplus of about 2.3 million barrels per day, as new supply continues to enter the market from multiple regions.
Goldman Sachs highlights that global oil inventories are rising rapidly, suggesting that market rebalancing may require lower oil prices in 2026, unless there are major supply disruptions or fresh production cuts from OPEC.
Notably, onshore oil inventories across OECD countries are becoming increasingly influential in price formation, as floating storage volumes remain elevated and are beginning to level off.
Under its base-case scenario, Goldman Sachs assumes that OPEC will not implement new production cuts in 2026. The bank argues that the supply increases seen in 2025 were strategic, reflecting producers’ efforts to protect long-term market share.
As a result, the current weakness in oil prices is not viewed as a sign of demand deterioration, but rather as a reflection of temporarily strong supply conditions in the short to medium term.
Goldman Sachs expects oil prices to remain under pressure throughout 2026, with a potential trough emerging in the fourth quarter of the year. Under this scenario, Brent crude could fall to around USD 54 per barrel, while WTI prices may decline to approximately USD 50 per barrel.
Downward pressure is expected to intensify as commercial inventories at OECD storage hubs continue to build at a rapid pace.
Supply growth outside OPEC is identified as a central factor weighing on oil price prospects. Goldman Sachs points to continued production increases in the United States and Russia, alongside a modest recovery in Venezuelan output.
These supply dynamics are not only pressuring spot prices but are also flattening and depressing the entire futures curve, reinforcing the medium-term bearish outlook.
Against the backdrop of persistent oversupply, Goldman Sachs has lowered its three-year fair value estimate for Brent crude by USD 5 to USD 64 per barrel. The bank has also reduced its average price forecasts for 2027, now projecting Brent at USD 58 and WTI at USD 54 per barrel.
Looking further ahead, Goldman Sachs has revised down its long-term outlook for the 2030–2035 period, cutting projected prices to USD 75 per barrel for Brent and USD 71 per barrel for WTI.
While geopolitical risks remain significant, Goldman Sachs argues that these factors are more likely to generate episodic price spikes rather than sustain a long-term rally.
The bank notes that policymakers—particularly in the United States—continue to favor abundant energy supply and relatively low oil prices, especially as the US approaches midterm elections.
Looking beyond 2026, Goldman Sachs expects oil prices to begin a gradual recovery from 2027, as non-OPEC supply growth slows and global demand remains resilient.
However, the bank emphasizes that any recovery is likely to be measured rather than sharp, adding that higher long-term prices are ultimately necessary to support renewed investment following years of subdued capital spending across the energy sector.
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