Goldman Sachs lowered its oil-price forecasts Tuesday after the U.S. and Iran reached an interim deal to end hostilities, predicting that Persian Gulf exports could return to prewar levels as early as late July — about a month sooner than the bank had previously expected.
The bank now forecasts Brent crude, the international oil benchmark, to average $85 a barrel this year and West Texas Intermediate $80 a barrel, down from its prior estimates of $90 and $85, respectively. For 2027, Goldman sees Brent at $75 a barrel and WTI at $70.
President Donald Trump said the U.S. would lift a naval blockade of Iranian ports and that the vital Strait of Hormuz waterway would reopen this week. A specific list of agreed-upon details has not been released, but the deal is set to be officially signed on Friday.
Goldman said risks to its outlook “remain two-sided.” Oil supply could recover faster than expected, with Gulf exports returning to prewar levels even if Hormuz traffic recovers to only about 70% of normal capacity, analysts said. Saudi Arabia and the UAE could also boost production more aggressively if inventories tighten over the summer.
Some shipments have already been rerouted through alternative channels, and oil flows from Gulf countries have increased from less than 30% of normal levels in early March to nearly 50% by mid-June, according to the bank’s estimates.
But the recovery could be slowed by a resumption of regional hostilities, shipping disruptions, mine-clearance delays, or a renewed closure of Hormuz. “Iran might effectively close the Strait again even after reopening, for instance if detailed nuclear talks don’t succeed,” Goldman analysts said.
Goldman expects prices to remain relatively resilient in 2027 despite forecasting a 3.2 million barrel-a-day surplus, saying low inventories and strategic stockpiling will cushion the impact. The bank said it expects more than 1 million barrels a day of demand to come from stockbuilding, while a lingering geopolitical risk premium should help put a floor under prices.
The bank also said the oil market has shown greater-than-expected flexibility, absorbing what it described as the largest production shock on record — about 14 million barrels a day — with a smaller-than-expected deficit in the second quarter.
In early European trading Tuesday, Brent crude was below $82 a barrel, while WTI slid to $79 a barrel. Both benchmarks have fallen more than 10% on the week. The Dow Jones Industrial Average stood at 51,671.03.