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Goldman Sachs Revises Oil Price Projections Lower on Increased Tariffs and OPEC+ Output

Mellissa · 04 Apr4.2K Views

Image Credit: Reuters

Goldman Sachs has lowered its oil price forecasts due to escalating tariffs and increased production from OPEC+ countries. The investment bank now expects Brent crude to average $69 per barrel and WTI to average $66 per barrel in 2025. For 2026, the projections have been reduced to $62 for Brent and $59 for WTI.

In addition, Goldman has revised its December 2025 price forecasts for both Brent and WTI down by $5, now anticipating prices of $66 and $62, respectively. The revision is based on weaker oil demand growth, which is now expected to be just 0.6 million barrels per day (mb/d) in 2025 and 0.7 mb/d in 2026, down from the previous forecast of 0.9 mb/d.

The downgrade also reflects a lowered GDP growth forecast, which accounts for a $3-4 reduction in the December 2025 oil price projection. Goldman Sachs has also stated that they no longer provide a price range, as volatility is likely to remain high due to growing recession risks.

In May, OPEC+ agreed to a larger-than-expected production increase of 411,000 barrels per day (kb/d), up from an earlier forecast of 135 kb/d. Goldman interprets this as a sign of low inventories and a strategic shift by OPEC+ to focus on maintaining internal compliance and managing non-OPEC production. This output hike contributes $2-3 to the downward revision in the December 2025 forecast.

Additionally, Goldman expects that the reaction from non-OPEC supply and demand in response to lower oil prices will help stabilize prices, contributing to a $1 reduction in the December 2025 forecast and $8 in the December 2026 projection.

However, the firm warns that risks to its reduced oil price outlook are tilted to the downside, especially for 2026, due to the growing likelihood of a recession and potential further increases in OPEC+ supply. They also note that short-term upside risks to oil prices from reduced sanctioned supply are likely to have less impact, as OPEC has shown flexibility in quickly implementing large production hikes.