• Goldman Sachs projects Brent crude will fall to the low $50s per barrel by late 2026, citing a significant and sustained global supply surplus.
  • The bank forecasts an average daily excess of 1.8 million barrels from late 2025 through 2026, leading to a build-up of up to 800 million barrels in global inventories.
  • Upside risks, including stronger Chinese stockpiling or weaker Russian output, could see the 2026 average price hold nearer to $62 per barrel.

Goldman Sachs has issued a stark forecast for the oil market, predicting that Brent crude prices will drop to the low $50s per barrel by late 2026. The call, based on an anticipated supply glut and rising inventories, represents a significant downward revision from current levels, with Brent trading around $67 and WTI at $63.

The core of the bank's analysis hinges on a predicted supply surplus averaging 1.8 million barrels per day beginning in late 2025 and continuing through the following year. This persistent oversupply is expected to trigger a substantial accumulation of global oil inventories, which could grow by as much as 800 million barrels by the end of 2026. A significant portion of this build-up, approximately 270 million barrels, is projected to occur within OECD nations, where demand is already showing signs of strain.

This inventory growth is a historically powerful downward force on prices and is expected to push them below the levels currently priced into forward contracts starting in 2026. The forecast suggests a new phase for oil markets, defined more by ample supply and stock accumulation than by the geopolitical supply scares that have frequently buoyed prices in recent years.

However, the analysts noted key variables that could alter this trajectory. The single largest upside risk identified is an acceleration in Chinese stockpiling. If China's strategic reserve purchases were to increase from the current rate of 0.4 million barrels per day to 0.8 million, the bank estimates the average Brent price for 2026 could be around $62—roughly $6 higher than its baseline scenario. Other factors, such as a sharper-than-expected decline in Russian output due to ongoing geopolitical tensions and Ukrainian attacks on energy infrastructure, could also provide a floor under prices.

The forecast, if realized, would have profound implications across the energy sector. Higher-cost producers would face intense margin pressure, potentially leading to reduced capital expenditures and industry consolidation. Conversely, oil-importing nations and consumers could benefit from a prolonged period of lower energy costs. A spokesperson for Goldman Sachs was not immediately available for further comment on the report.

Correction: An earlier version of this article misstated the current trading price of WTI crude; it is approximately $63 per barrel.