Oil markets are facing mixed signals right now. On one side, there are strong risks pushing prices higher. On the other, there is a base case of prices cooling in the long term.
Goldman Sachs has highlighted that the balance of risks remains tilted to the upside. This applies both in the near term and even looking ahead to 2027.
Oil price outlook shows upside risk above $100
Goldman Sachs believes oil prices could stay elevated. The bank pointed to past supply shocks that lasted longer than expected.
These shocks have historically kept prices high for extended periods. Because of this, there is a real risk that oil could remain above 100 USD per barrel. This outlook is driven by supply side uncertainty. Any disruption in production or transport can quickly push prices higher.
The market is already sensitive to geopolitical tensions and supply constraints. This adds to the upside pressure.
Brent crude forecast to ease toward $70s by late 2026
Despite the bullish risks, Goldman Sachs has a base case scenario. The bank expects a gradual recovery in oil flows starting April.If supply improves steadily, prices may cool down over time. Brent crude is expected to move toward the 70 USD range by the fourth quarter of 2026.
This suggests a more balanced market in the long term. Increased supply could ease current pressure.
Supply shocks and uncertainty keep oil markets volatile
The key factor remains supply disruption. Past events show that oil markets can stay tight for longer than expected. Even if flows recover, any new disruption can reverse the trend quickly. This keeps volatility high.
Goldman Sachs is clearly signaling caution. While prices may stabilize later, the near term risk is still skewed toward higher oil prices.
This means markets should prepare for continued swings and potential price spikes.