Oil prices to decline through 2026 on supply wave – Goldman Sachs

Global oil prices are set to decline through 2026, as production hikes will keep the market in a surplus of around 2 million b/d, according to a Goldman Sachs report cited by investment research firm HFI Research.

IMAGE: Oil storage tanks in a refinery. Getty Images

Brent crude’s price is projected to decline to an average of $56/bbl in 2026, well below current forward curves of $63/bbl, the global investment bank said.

The projection comes as OPEC+ partners continue to ramp up production steadily from April this year.  

At the same time, non-OPEC suppliers — including the US and Brazil — continue to pump more crude, deepening concerns of a supply surplus and keeping pressure on prices.

Crude oil prices could “fall into the $40s” if non-OPEC supply remains more resilient or “if we enter a recession,” Goldman Sachs said.

Other energy agencies, including the International Energy Agency (IEA), also project global oil demand to remain well below oil production levels.

“Global oil market balances are looking increasingly lopsided, as world oil supply is forging ahead while oil demand growth remains modest by historical standards,” the IEA said earlier.

Goldman Sachs expects oil prices to rebound from 2027 as the market “returns to balance” amid oil demand growth. The bank forecasts a shift in supply to a deficit in the second half of 2027 “as low 2026 prices depress non-OPEC supply and demand keeps growing.”

Meanwhile, oil prices in 2027 could rise above $70/bbl if Russian supply declines more sharply, Goldman Sachs said.

In late 2028, Brent crude’s price is estimated to hit $80/bbl. This price surge is needed to spark investment “to balance the market in the early 2030s,” according to Goldman Sachs.  

“The risks to our long-term price forecast are even larger because technology, geopolitics, and the demand hit from low-carbon alternatives are hard to predict,” the investment bank added.

By Aparupa Mazumder

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