Staff Reporter
Goldman Sachs Group Inc. has revised its oil price forecasts downward, citing reduced growth prospects for the U.S. due to tariffs and increased output from OPEC and its allies.
This adjustment comes on the heels of a decline in crude prices from January’s peak, driven by a surplus in supply, weak demand from major importer China, and an intensifying international trade conflict.
In a note released Sunday, analysts at Goldman, including Daan Struyven, noted, “The $10 per barrel drop since mid-January exceeds the changes in our fundamental outlook. Consequently, we are lowering our December 2025 forecast for Brent crude by $5 to $71. The medium-term outlook carries downside risks, particularly with potential further tariff escalations and extended increases in OPEC+ production.”
Major oil traders, such as Vitol Group and Gunvor Group, are adopting a more pessimistic stance, predicting an oversupply in the market.
Last week, the International Energy Agency reported that demand is being pressured by the escalating trade war and the commitment of OPEC and its allies to ramp up shipments, forecasting a surplus of 600,000 barrels for this year, roughly 0.6% of global daily consumption.
Despite these challenges, Goldman Sachs anticipates a “modest” recovery in oil prices over the coming months, as U.S. economic growth remains stable for the time being, and there are no immediate signs of relief from Washington’s sanctions.
Ongoing geopolitical tensions also pose risks, including a recent U.S. order to target sites in Yemen controlled by the Houthis, who are threatening shipping routes in the Red Sea.
Goldman projects that oil demand will increase by 900,000 barrels per day in January, a reduction of 18% from earlier forecasts. The bank expects Brent crude to trade between $65 and $80 per barrel, averaging $68 next year.
