Goldman Sachs sees oil averaging $130 a barrel next year

Goldman Sachs says oil prices could average $130 a barrel next year if Middle East output keeps taking hits, with a $140 peak possible in 2027.

Analysts at the investment bank, led by Daan Struyven, head of oil research, laid out that scenario in a Sunday note. Their math: Brent would average $130 through 2027 and touch $140 if regional supply stays 3.5 million barrels a day below its 2025 average. The likely triggers they named are increasing shipping attacks, sustained damage to oil refineries and a consistent risk premium.

That's the risk case. Goldman's base case is tamer but still pricey: Brent averaging $88 a barrel next year, up from the bank's previous forecast of $80. That assumes supply rises to 1.1 million barrels a day above last year's average.

How much has Brent already moved?

Brent crude has jumped by almost 80% since the start of the year and now sits at roughly $108 a barrel. The rally started after the U.S. and Israel first launched strikes on Iran at the end of February. The pressure hasn't let up. The White House is reportedly weighing a military campaign after Tuesday's midterm elections, and on Sunday Iran warned that any new war with the U.S. and Israel could last longer than the previous one.

Supply from the region is currently recovering, Struyven's team noted — but they see a high risk of fresh reductions.

The bottom line: an 80% year-to-date rally leaves the market priced for continued conflict, and Goldman thinks the risk is skewed further up, not down.

What are the chances of a ceasefire?

A team of mediators met over the weekend in Qatar to discuss ending the war. They're now waiting for Washington's response to Tehran's proposal to reopen the Strait of Hormuz — if the Trump administration agrees to a set of economic and military conditions.

The war in Iran has become a key issue for U.S. voters heading to the polls. The energy shock has driven up domestic prices and fueled frustration over American involvement in foreign politics.

Why is forecasting so hard right now?

Because, as Goldman's analysts put it, the drivers are unpredictable by nature.

“The Mideast and Russia-Ukraine conflicts, alongside broader geopolitical fragmentation, create high disruption risk,” Struyven's team wrote. “With the timing and location of disruptions nearly impossible to predict.”

Translation: even the bank's $88 base case rests on assumptions that one shipping incident or refinery strike could upend.

Could oil crash instead?

Goldman also runs a downside scenario, and it's steep. Brent could decline into the $60s in 2027 if average output from the Persian Gulf rises to 2.5 million barrels a day above the 2025 figure. The most likely trigger there, the analysts said, would be a quicker-than-expected recovery in Middle East exports.

So the bank's 2027 range now spans roughly $60-something to $140 — a spread that says less about oil fundamentals than about a war whose next move nobody, including Goldman, can model. Watch the White House's answer to Tehran's Strait of Hormuz proposal; it sits at the center of every scenario in the note.