Global Oil Markets Face Heightened Volatility as Goldman Sachs Revises Price Forecasts Upward Amid Middle East Tensions

In a significant development reflecting the escalating pressures on global energy supplies, investment giant Goldman Sachs has substantially increased its oil price projections for the fourth quarter (Q4). This upward revision is directly attributed to persistent supply disruptions emanating from the Middle East, a region pivotal to global energy security.

According to a recent report by Reuters, the influential bank now forecasts Brent crude to hit $90 per barrel, with US West Texas Intermediate (WTI) following closely at $83. These figures underscore the profound impact of regional instability on international commodity markets.

The April 26 report, spearheaded by Daan Struyven, co-head of Global Commodities Research and head of Oil Research at Goldman Sachs, highlighted that broader economic risks are now perceived to exceed the bank’s initial base crude scenario. Analysts pointed to several critical factors driving this outlook:

• Upward pressure on oil prices driven by geopolitical realities.
• Persistently high refined product prices, signaling underlying market stress.
• Increased risks of supply shortages, particularly from key producing regions.
• The sheer magnitude of the current market disruption, which continues to challenge global stability.

A key assumption in this updated forecast is that Gulf exports through the vital Strait of Hormuz will only normalize by the end of June, a timeline significantly later than the previously anticipated mid-May recovery. This delay, coupled with a more gradual recovery in broader regional production, paints a picture of prolonged market tightness.

The bank’s analysis suggests that crude supply losses in the Middle East are staggering, estimated at approximately 14.5 million barrels per day (mmbbl/d). This substantial deficit is contributing to an unprecedented global inventory draw of 11–12 mmbbl/d in April, a rate unsustainable in the long term.

Looking ahead, Goldman Sachs anticipates a dramatic shift in the global oil balance. What was once projected as a surplus of 1.8 mmbbl/d in 2025 is now expected to reverse sharply, moving into a significant deficit of 9.6 mmbbl/d in the second quarter (Q2) of 2026. This stark reversal highlights the precarious nature of future energy supplies.

On the demand side, global consumption is projected to decline by 1.7 mmbbl/d in Q2, with an additional annual drop of 100,000 barrels per day (bbl/d) in 2026. This expected contraction is largely due to the burden of higher refined product prices, which are increasingly weighing on consumer spending and industrial activity.

The analysts issued a stern warning: such significant inventory declines cannot be sustained indefinitely. They cautioned that deeper demand reductions may become an unfortunate necessity should the current supply shock persist, signaling potential economic headwinds for nations reliant on stable energy imports.