Goldman Sachs has raised its December 2026 Brent crude forecast to $105 a barrel, up from $90, warning that substantial risks to supply are likely to keep a large risk premium embedded in oil prices. The bank also lifted its December forecast for US West Texas Intermediate (WTI) crude to $94 a barrel from $81.

The upgrade, published in a note dated 1 November and reported by Bloomberg on 2 November, extends beyond the year end. Goldman now expects Brent to average $88 a barrel in 2027, up from $80, and WTI to average $78, up from $73. Analysts Daan Struyven and Yulia Zhestkova Grigsby wrote that markets are assigning increasing weight to escalation after the 3 November US midterm elections and to subsequent weakness in Middle East supply.

Upside case points to $140 Brent

In an upside scenario, Goldman said Brent could reach $140 a barrel and average around $130 in 2027 if Gulf oil output remains 3.5 million barrels a day below its 2025 average. The bank has built a one-million-barrel-a-day global supply disruption allowance into its 2027 base case, arguing that the timing and location of disruptions are nearly impossible to predict. It estimated the implied geopolitical risk premium at about $27 a barrel, explaining most of Brent's rise to $118 in October.

Goldman is not alone in the revision. Morgan Stanley raised its fourth-quarter Dated Brent forecast to $105 a barrel, while ANZ lifted its year-end Brent outlook to the same figure. The upgrades landed even as Brent slipped on Monday, 2 November, on hopes for progress in Iran-Qatar talks, a reminder that forecasts and spot prices can move in opposite directions on the same day.

Sources: Bloomberg via The Hindu Business Line; OilPrice.