Crude Oil Outlook: Goldman Sachs Lowers Brent Forecast Amid Weak Demand & Rising OPEC+ Supply
Crude Oil :Goldman Sachs has revised its projections for Brent and West Texas Intermediate (WTI) crude oil prices, adjusting its forecasts downward due to anticipated subdued demand growth and increased supply from OPEC+ nations. In a recent note, the investment bank now expects Brent crude to reach $71 per barrel by December 2025, a reduction of $5 from its prior estimate, and WTI to settle at $67 per barrel. Additionally, Goldman Sachs has lowered its average Brent forecast for 2026 to $68 per barrel from $73, and WTI to $64 from $68.
Factors Influencing the Revised Forecast
Several key elements have contributed to Goldman Sachs’ updated outlook:
- Slower Oil Demand Growth: The bank has adjusted its oil demand growth projection for 2025 to 0.9 million barrels per day (mb/d), down from the previous estimate of 1.1 mb/d. This revision accounts for anticipated slower U.S. GDP growth, influenced by heightened tariffs and economic uncertainties.
- Increased OPEC+ Supply: Expectations of higher output from OPEC+ countries have also played a role. Production increases from these nations are now anticipated to commence in April 2025, earlier than the previously projected July timeline.
Global Production Dynamics
Russia, a significant player in the global oil market, has projected its oil output to be between 515-520 million metric tonnes in 2025. Deputy Prime Minister Alexander Novak indicated that oil processing volumes are expected to surpass those of 2024. Novak also commented on the current balance of the global oil market, suggesting that the planned OPEC output increase of 100,000 barrels per day would not disrupt this equilibrium.
Current Oil Price Movements
As of March 18, 2025, oil prices have experienced an uptick, influenced by geopolitical tensions in the Middle East and China’s plans for economic stimulus. Brent futures rose by 0.2% to settle at $71.24 per barrel, while U.S. West Texas Intermediate crude increased by 0.2% to $67.72 per barrel. Analysts attribute this support to U.S. military actions in Yemen and unexpectedly strong economic data from China, including growth in retail sales and fixed asset investments. Reuters
Comparative Forecasts from Other Institutions
Goldman Sachs is not alone in revising oil price forecasts. Barclays, for instance, has reduced its 2025 Brent oil price projection by $9 per barrel to $74, citing a softer demand outlook and elevated economic uncertainty. The bank also revised its 2025 demand outlook down by 510,000 barrels per day due to weak high-frequency indicators and ongoing economic uncertainty. Reuters
Financial Ratios and Projections
To provide a clearer picture of the anticipated oil market landscape, here’s a comparative table of the revised forecasts:
| Metric | Previous Forecast | Revised Forecast | Change |
|---|---|---|---|
| Brent Crude (Dec 2025) | $76 per barrel | $71 per barrel | -$5 |
| WTI Crude (Dec 2025) | $72 per barrel | $67 per barrel | -$5 |
| Average Brent (2026) | $73 per barrel | $68 per barrel | -$5 |
| Average WTI (2026) | $68 per barrel | $64 per barrel | -$4 |
| Demand Growth (2025) | 1.1 mb/d | 0.9 mb/d | -0.2 mb/d |
Note: The figures above are based on Goldman Sachs’ projections as of March 2025.
Implications for the Global Oil Market
The downward revisions in oil price forecasts by major financial institutions like Goldman Sachs and Barclays suggest a cautious outlook for the global oil market. Factors such as economic uncertainties, trade tensions, and geopolitical developments are expected to influence both supply and demand dynamics. Market participants, including producers, consumers, and investors, should remain vigilant and adapt to these evolving conditions.
Q&A Section
Q: Why did Goldman Sachs lower its Brent crude oil price forecast for December 2025?
A: Goldman Sachs reduced its forecast due to expectations of slower oil demand growth and increased supply from OPEC+ nations. The bank now projects Brent crude to reach $71 per barrel by December 2025, down $5 from its previous estimate.
Q: How has the projection for oil demand growth in 2025 changed?
A: The bank has adjusted its oil demand growth projection for 2025 to 0.9 million barrels per day (mb/d), down from the previous estimate of 1.1 mb/d, reflecting anticipated slower U.S. GDP growth influenced by heightened tariffs and economic uncertainties.
Q: When are OPEC+ production increases expected to begin, according to Goldman Sachs?
A: Production increases from OPEC+ countries are now anticipated to commence in April 2025, earlier than the previously projected July timeline.
Q: How have other financial institutions adjusted their oil price forecasts?
A: Barclays, for instance, has reduced its 2025 Brent oil price projection by $9 per barrel to $74, citing a softer demand outlook and elevated economic uncertainty.
Q: What recent geopolitical events have influenced current oil prices?
A: Recent geopolitical events, including U.S. military actions in Yemen and unexpectedly strong economic data from China, have contributed to an uptick in oil prices. As of March 18, 2025, Brent futures rose by 0.2% to settle at $71.24 per barrel.
This comprehensive overview underscores the complex interplay of factors influencing the global oil market, highlighting the need for stakeholders to stay informed and adaptable in a dynamic environment.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.