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Brent crude oil prices remain volatile as Goldman Sachs raises its December forecast to $90 per barrel amid persistent West Asia supply concerns. (Images: X)
New Delhi: International oil prices could remain under pressure from geopolitical uncertainty, with Goldman Sachs raising its December 2026 forecast for Brent crude to $90 per barrel from its earlier estimate of $85. The revised outlook reflects persistent supply risks linked to the West Asia conflict, even as the investment bank expects prices to ease from their current levels.
Goldman Sachs has increased its December 2026 Brent crude forecast by around 6% to $90 per barrel, citing the possibility that supply disruptions could take longer to ease than previously anticipated. According to the report, geopolitical uncertainty continues to support a substantial risk premium in oil market time spreads. The bank estimates this premium at slightly above $20 per barrel, with ongoing supply concerns likely to slow its gradual decline. Despite the upward revision, the new December forecast remains nearly 13% below Brent crude's current price of approximately $103 per barrel.
The bank has also maintained its average Brent crude price forecast of $80 per barrel for 2027, indicating expectations of lower prices over the longer term if supply conditions gradually improve.
The conflict in West Asia has emerged as a major factor influencing global crude oil prices. When the war began in late February 2026, Brent crude was trading at around $70 per barrel. Prices subsequently surged above $125 as shipping disruptions around the Strait of Hormuz heightened concerns about global oil supplies. The strategic waterway handles approximately one-fifth of the world's oil shipments, making any disruption a significant concern for energy markets.
As the route gradually reopened, crude prices moderated towards pre-conflict levels. However, renewed concerns over supply security pushed prices back towards the $100-per-barrel mark. Goldman Sachs expects the pace at which the risk premium declines to depend heavily on developments in the region, recovery of Gulf oil production and the security of energy transportation routes. The bank also highlighted low inventories and interest-rate sensitivity as factors influencing physical oil restocking and financial hedging activity.
Goldman Sachs expects West Texas Intermediate (WTI), the US crude oil benchmark, to average $81 per barrel in December 2026 and $73 per barrel in 2027. The projections reflect an unusually wide price gap between WTI and Brent crude, partly driven by elevated shipping costs for transporting US oil to Europe. Although the bank's baseline outlook points towards lower oil prices in 2027, a prolonged disruption to Gulf production could significantly change that trajectory.
Goldman Sachs warned that Brent crude could average around $125 per barrel in 2027 if average Gulf oil output remains 5 million barrels per day below February 2026 levels. Its base-case scenario assumes production will be only 0.3 million barrels per day below that benchmark. Damage to oil infrastructure, escalating attacks on shipping and a more persistent geopolitical risk premium are among the key factors that could push prices higher.
For energy-importing economies including India, the direction of international crude prices will remain important for fuel costs, inflation risks and the country's import bill. Extent of the impact will depend on the duration of supply disruptions, global demand and movements in currency exchange rates.
For now, Goldman Sachs' outlook suggests that oil prices could ease by December, but the possibility of renewed supply shocks remains a major risk for the global energy market.
