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Brent Crude oil prices are set to average $76 per barrel next year, down from an expected average of $80 a barrel in 2024, amid an expected surplus on the market, according to Goldman Sachs.
“Our base case is that Brent stays in a $70-85 range, with high spare capacity limiting price upside, and the price elasticity of OPEC and shale supply limiting price downside. However, the risks of breaking out are growing,” the investment bank’s analysts wrote in a note carried by Reuters.
Goldman Sachs expects 400,000 barrels per day (bpd) of surplus on the market in 2025. This surplus is expected to grow to 900,000 bpd in 2026. Therefore, the Wall Street bank sees Brent Crude prices averaging $71 per barrel in 2026.
Goldman Sachs kept its 2025 average price forecast from last month when it said that it sees limited upside for oil prices next year amid sufficient supply and ample spare capacity.
However, there is an upside risk to prices in the near term, if the U.S. enforces stricter sanctions on the Iranian oil industry and exports, according to Goldman Sachs.
Brent Crude prices have the potential to spike to the mid-$80s early next year if Iran’s oil supply declines by about 1 million bpd in case of stricter sanction enforcement when Donald Trump becomes U.S. President, the bank’s analysts noted.
Early on Friday, Brent Crude prices were up by 0.4% at $74.57, and the U.S. benchmark, WTI Crude, traded 0.36% higher at $70.40, amid renewed Ukraine-Russia tensions.
Oil prices were on track to post a weekly gain after Russia shot a new kind of ballistic missile at Ukraine in the latest sign that the escalation there continues. The strike, featuring a hypersonic medium-range missile that has not been used before in warfare, came in response to a Ukrainian attack with U.S. and British ATACMS missiles on Russian territory.
