Goldman Sachs expects oil prices to decline through the end of this year and next year because of the rising risk of a recession and higher supply from the OPEC+ group.
The bank expects Brent and WTI oil prices to edge down, averaging $63 and $59 a barrel, respectively, for the remainder of 2025, and $58 and $55 in 2026.
Given the weak growth outlook amid a global trade war, the bank expects that oil demand will rise by only 300,000 barrels per day (bpd) between the end of last year and the end of 2025.
The bank has cut its global demand growth forecasts for the fourth quarter of 2026 by 900,000 barrels-per-day since mid-March due to an escalating trade war between the U.S. and China.
Beijing increased its tariffs on U.S. imports to 125% on Friday, hitting back against President Donald Trump’s decision to raise duties on Chinese goods and raising the stakes in a trade war that threatens to upend global supply chains.
The Wall Street brokerage forecasts that despite the market already accounting for some future inventory builds, large surpluses of 800,000 bpd in 2025 and 1.4 million bpd in 2026 will continue to exert downward pressure on oil prices.
Oil extends decline as US-China trade war weighs on global growth outlook
In a scenario of a global economic slowdown or a complete reversal of the 2.2 million bpd of voluntary cuts by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, Brent oil prices could likely fall into the $40 range in 2026, and potentially drop below $40 in an extreme combined scenario, the bank said.
Brent crude futures slipped to trade around $64.72 a barrel as of 0155 GMT on Monday, while WTI futures were at $61.44.
Goldman Sachs also lowered its U.S. shale supply forecast for the fourth quarter of 2026 by 500,000 bpd.
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