FX.co ★ Oil falls in defiance of Goldman’s forecasts

Goldman Sachs has pushed back its timeline for restoring oil exports from the Persian Gulf from the end of June to the end of August. At the same time, the bank kept its Brent forecast for Q4 2026 at $90 per barrel, arguing that a prolonged closure of the Strait of Hormuz would be offset by a smaller-than-expected supply shortfall.

Analysts estimate a supply deficit of 5–6 million barrels per day in Q2. That is far below the actual production losses in the Middle East, which they put at 14–15 million barrels per day. Two factors softened the shock to the market: a drop in demand of almost 5 million barrels per day and pre‑war oversupply. As a result, Brent spot futures have slumped about 25% from March peaks amid reduced investor panic following the announced truce.

Goldman economists led by Daan Struyven note that restoring normal exports to 23 million barrels per day requires only about 70% recovery of transit through the Strait of Hormuz. The remaining volumes would be routed via already used bypass channels through Yanbu, Fujairah, the Gulf of Oman, and Ceyhan. The main bottleneck for deliveries is a lack of pipeline capacity to move already produced oil, while drilling activity in the region continues to operate normally.

The bank lowered its Brent forecast by $5 to $80 per barrel for 2027. Supply will rise due to the United Arab Emirates’ exit from OPEC as well as increases from Brazil, Guyana, and Venezuela. However, demand will not fully recover: more than 10% of the lost demand is expected to be permanent because of China’s accelerated shift to green technologies. The share of electric vehicles in passenger car sales in China jumped from 50% in February to 62% in May.

Despite an expected 2027 oil surplus of 3.5 million barrels per day, prices should avoid a collapse thanks to depleted OECD inventories and a persistent geopolitical premium. Goldman also outlines tail scenarios: if the Strait of Hormuz remains closed through year‑end, Brent could surge to $140 per barrel; if exports fully get back on track as soon as July amid abundant supply, oil prices could fall to $60 per barrel.