Goldman Sachs Raises Year-End Brent Oil Forecast to $105 on Middle East Supply Disruption Fears

Goldman Sachs has raised its oil price forecasts to reflect mounting uncertainty over crude supply tied to military tensions in the Middle East.

Bloomberg reported on November 2 that Goldman, in a report dated November 1, lifted its December Brent crude forecast to $105 a barrel from $90. It also raised its 2027 average price estimate by 10% from its previous outlook to $88 a barrel. The bank increased its forecast for West Texas Intermediate as well.

Analysts including Daan Struyven and Yulia Zhestkova Grigsby wrote that the risk of disruptions to Middle East oil supplies will keep a hefty risk premium in crude prices for the time being. They said markets are factoring in a greater chance of military conflict escalating after the U.S. midterm elections than before.

Oil prices continued to rise last month even as Middle Eastern crude supply neared prewar levels. Brent gained 14% in October, reaching its highest level in six months. Geopolitical tensions added to the advance after U.S. President Donald Trump repeatedly mentioned the possibility of resuming airstrikes on Iran after the midterm elections.

Iran is also preparing for the possibility of further attacks by the U.S. and Israel. Iran's supreme leader has reportedly instructed military commanders to prepare for a new military conflict. Goldman said oil prices could rise further if attacks on ships expand and energy infrastructure is damaged.

The bank also incorporated supply uncertainty stemming from the Russia-Ukraine war into its revised outlook. Goldman said it built a global supply disruption of 1 million barrels a day into its 2027 base-case forecast, citing the difficulty of predicting when and where disruptions to crude production and transportation may occur.

Other global investment banks have also raised their oil outlooks. Morgan Stanley lifted its forecast for spot Brent crude in the fourth quarter to $105 a barrel, while Australia and New Zealand Banking Group also projected Brent futures at the same level by year-end.

Brent futures were lower on the day, trading around $110 a barrel. Investors are focused on how the Middle East situation evolves after the U.S. midterm elections, along with supply conditions among major oil producers, as key drivers of the next move in crude prices.