Will Oil Prices Decline?
The desk sees a potential moderation in oil prices as supply from the Persian Gulf rebounds to pre-war levels, providing a bearish backdrop for Brent crude in 2027. Goldman Sachs projects that Brent could stabilize at $80 per barrel, up from earlier forecasts as geopolitical tensions continue to play a key role in price dynamics. Per the full note from Goldman Sachs, increased exports from the Persian Gulf, combined with a thoughtful recovery of German exports in the first half of 2026, support this outlook. The persistence of elevated prices, despite the expected supply increase, suggests traders should monitor developments closely for shifts in sentiment.
What the desk is arguing
The desk asserts that oil prices are likely to trend lower due to a recovery in Persian Gulf exports, which are nearing pre-war levels. Goldman Sachs indicates that this could lead Brent crude to average around $80 per barrel in 2027, a shift from earlier projections of $85. The resurgence in supply is expected to counterbalance persistent geopolitical risks that could otherwise prop up prices.
Supporting this outlook is the recent data showcasing a rebound in German exports, highlighting that stronger European demand could complement refined oil product requirements. Goldman Sachs' Daan Struyven has revised the December 2026 Brent price forecast upward to $90 per barrel, underscoring the complexity of the oil market, where higher supply must contend with enduring geopolitical tensions.
Where it sits in our coverage
Our consensus target aligns with a growing expectation for oil prices to plateau around $80 per barrel in 2027, reflective of a stable supply and demand relationship. Notable forecasts include: - jpmorgan: $80 per barrel (Dec-26) - bofa: $75 per barrel (Dec-26) - ubs: $78 per barrel (Dec-26)
Goldman Sachs’ revised expectations position them on the higher end of the spectrum, suggesting a more optimistic view among commodity analysts as the market navigates through recovery dynamics and geopolitical considerations.
How other firms see it
Firms like jpmorgan and ubs express a similarly optimistic forecast regarding Brent prices, although bofa takes a more conservative stance, predicting lower average prices reflecting concerns over demand growth. This divergence illustrates varying perspectives on global oil demand recovery.
With oil price trajectories critical to various currency pairs, traders should pay close attention to USD/CAD and AUD/USD movements as they are sensitive to oil price fluctuations, which highlight the broader macroeconomic outlook.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Goldman Sachs sees Brent crude averaging $80 per barrel in 2027.
- 02Oil exports from the Persian Gulf are rebounding, nearing pre-war levels.
- 03Geopolitical tensions remain a risk factor despite increasing supply.
- 04German export strength may signal recovery that impacts oil demand.
Market implications
Traders should keep an eye on the $80 per barrel level as a significant pivot in Brent crude prices, particularly in light of Goldman Sachs' projections. The interplay between supply recovery and geopolitical developments will be crucial for positioning in related currency pairs such as USD/CAD.
Risks to this view
A sudden escalation in geopolitical tensions, particularly involving key players in the Middle East, could dramatically alter the outlook, keeping Brent prices higher than forecast. Additionally, unexpected economic weakness in major economies could suppress demand, disrupting the supply-demand balance.
German exports rebound .keep-white { color:#ffffff !important; } .keep-black { color:#000000 !important; } .gsFooterGrey * { color:#000000 !important; } ul.gsFlushList li { text-indent:-1em !important; margin:0 0 0 25px !important; } table { border-collapse:collapse; border-spacing:0; } img { height:auto !important; } .gsContentWidth { width:640px !important; } Briefings Newsletter ( ) Briefings Newsletter ( ) The key insights ( ) today: ▪ Oil exports from the Persian Gulf are back around their pre-war levels, which should help bring down the price of Brent crude in 2027, according to Goldman Sachs’ head of oil research. ▪ Quoted: Creating an opening for Chinese products in global markets. ▪ US share buybacks are on the rise, even as the increasing cost of debt threatens to curb repurchases, writes Ben Snider, chief US equity strategist. ▪ Germany’s exports posted surprising strength in the first half of 2026 following a long period of relative weakness. ▪ Briefings Brainteaser: What percentage of people use AI to plan their retirement? Want to sign up and stay connected? Click here ( ).
Will Oil Prices Decline as Middle East Supply Recovers? ( ) Oil prices are forecast to moderate ( ) over the next year as shipments from the Middle East gradually recover, though prices may stay high for longer than anticipated given the risk of escalation in the conflict involving the United States, Israel, and Iran, according to Goldman Sachs Research. Daan Struyven, co-head of global commodities research and head of oil research, now expects Brent crude to trade at $90 a barrel in December 2026, up from a prior forecast of $85. His team sees Brent averaging $80 a barrel in 2027.
Persian Gulf oil exports, including an estimated four million barrels per day of “dark” shipments on tankers that turn off their transponders to hide their movements, have rebounded close to 2025 levels since late September. Struyven’s team expects supply from the Persian Gulf to “trend higher as continued adaptation and added transportation resources—especially pipelines and a larger tanker fleet—support further gains,” he adds. Still, physical oil prices remain elevated, with a $25 risk premium boosting spot Brent, our commodities analysts estimate.
Inventories that are near record lows are increasing demand, and investors who are using oil as a portfolio hedge are also lifting prices. ( ) The key driver of the forecast for lower prices is our researchers’ base case for the global oil market ( ) to shift to a surplus starting in the fourth quarter of 2026. This will be a result of Gulf suppliers adapting, higher output from non-Gulf suppliers, and demand reductions caused by recent high prices. Quoted: How Chinese Companies Are Increasing Market Share ( ) Trina Chen on Goldman Sachs Exchanges “If you see companies cede the peripheral market or the low-end segment, they essentially are giving the beachhead to the competitors, the Chinese competition, and letting them have the opportunity to move forward from there to the upper market.
So, you increase the risk in the future.” —Trina Chen, co-head of Greater China Equity Research Chinese companies often enter new markets that are underserved by established incumbents, says Chen. Investment by these incumbents may be relatively “lean” because the market segment is no longer their focus. That results in an asymmetric environment with better chances of success for Chinese companies.
Listen to the full episode of the Goldman Sachs Exchanges ( ) podcast for more on the surge in Chinese exports. Will Rising Rates Derail Surging Share Buybacks? US boards are authorizing their companies to repurchase more and more of their own shares.
The growth in buybacks has accelerated in recent quarters as an increased rate of repurchases by artificial intelligence (AI) infrastructure companies has offset the decline in buybacks from hyperscalers, according to Ben Snider, chief US equity strategist in Goldman Sachs Research. “However, if interest rates continue to rise, a narrowing gap between the cost of debt and cost of equity will likely restrain the pace of corporate buyback growth,” Snider writes in a report. The sharp increase in rates this year has reduced the gap between the S&P 500 cost of equity and the cost of debt to around two percentage points—one of the narrowest levels in recent decades, according to Goldman Sachs Research. With the cost of debt nearing the cost of equity, equity issuance becomes more attractive relative to debt financing, which could prompt companies to rely more on equity capital and rein in buybacks, according to Snider.
But given that Goldman Sachs Research expects interest rates to decline next year, Snider’s base case is for buyback growth to continue in 2027. His team expects US corporate buybacks to total $1.7 trillion in 2027, up from $1.5 trillion this year. Read more of our insights about financial markets ( ).
German Exports Rebound amid Resilient Demand ( ) Germany’s exports increased in the first half of 2026 and are providing a modest boost to economic growth, according to Goldman Sachs Research ( ) . Our economists forecast real export growth of 3.5% in 2026 and 2.4% the following year. Strong export performance in the first half of 2026 is consistent with healthy foreign demand and a modest improvement in relative unit labor costs, driven by stronger productivity growth.
In addition to improved competitiveness, our economists expect revived trade with the US and the European Union, plus the global AI buildout to boost the outlook for German trade. "Taken together, we are more optimistic about German export performance than at the start of 2026," writes Niklas Garnadt, an economist in Goldman Sachs Research, in a report. ( ) Garnadt cautions that Chinese competition is likely to keep challenging German exporters over the medium term, particularly in third markets. Even so, Garnadt points out that Germany’s surprisingly positive performance in the first half of 2026 shows a significant shift in the export sector following a long period of relative weakness. Read the full article ( ) on Germany’s export sector.
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