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Investing.com -- Goldman Sachs lowered its oil price forecasts after President Trump announced an interim deal that would lift the U.S. blockade and reopen the Strait of Hormuz following a scheduled signing on Friday, with the bank now assuming Persian Gulf exports normalize to pre-war levels by the end of July, a month earlier than its prior assumption of end-August.
The bank cut its fourth-quarter 2026 Brent forecast to $80 a barrel from $90 previously, and its 2027 average forecast to $75 from $80. WTI is now expected to average $75 in the fourth quarter of 2026 and $70 in 2027.
Goldman said moving the supply normalization timeline forward by a month reduces the fair value of crude for those periods by around $10 and $5 a barrel, respectively.
The bank’s strategists including Daan Struyven said the risks to its supply recovery assumption are "two-sided." On the upside, they noted that Gulf flows have already risen to an estimated 11 million barrels per day, and that reaching pre-war export levels would require just a 12 million barrel-per-day increase in Hormuz flows to 70% of pre-war volumes.
Saudi Arabia and the UAE could also respond more aggressively to low OECD commercial stocks, while Iranian output could rise further on potential sanctions relief.
On the downside, a resumption of regional hostilities or strikes on tankers "might keep shippers risk-averse," mine clearance could take significant time, and Iran could move to close the Strait again if broader nuclear talks fail, the strategists said.
Despite a forecast 3.2 million barrel-per-day surplus in 2027, Goldman expects Brent and WTI to hold near their long-term fair values of $75 and $70, citing limited room for stock builds after large first-half draws and a structural trend of strategic stockpiling exceeding 1 million barrels per day next year.
"Some security premium compensating for disruption risk is likely to keep a floor under prices," the strategists wrote.
Goldman said risks to its price forecast remain tilted toward the upside on net. In an upside scenario where Hormuz remains disrupted through 2027, Brent could top $130 in late 2026 and average $105 next year.
In a downside case involving an earlier export recovery, stickier demand losses and stronger supply, Brent could average just under $70 in the fourth quarter of 2026 and below $60 in 2027.
