Goldman Sachs expects oil prices to drop below $40 per barrel in the event of a global economic recession and the cancellation of OPEC+ cuts. Goldman Sachs indicated that Brent crude prices could face the risk of falling below $40 per barrel in extreme economic conditions, such as the worsening of the trade dispute and increased supply. This forecast came after the bank lowered its oil price estimates twice in one week.
In a note dated April 7, the bank’s analysts stated that “in a more extreme and less likely scenario, with a slowdown in global GDP growth and a complete cancellation of OPEC+ cuts, which may lead to adjustments in the supply of non-OPEC countries, we expect Brent crude prices to fall slightly below $40 per barrel in late 2026.” However, the bank emphasized that this is not its base case forecast, which suggests that Brent crude will reach $55 per barrel by December.
Shocks in the Global Oil Market:
The global oil market has experienced volatility recently, as the escalation of the trade dispute led by the Trump administration, along with responses from economies like China, has increased the risk of recession and other factors affecting energy consumption. At the same time, OPEC+ shifted its course by increasing supply after a long period of reducing it.
In light of these developments, major banks like Goldman Sachs, Morgan Stanley, and Société Générale have lowered their base oil price forecasts. If an economic recession occurs in the U.S., with fundamental impacts on supply and demand, Goldman Sachs analysts predict that Brent crude will reach $58 per barrel in December and $50 in the same month next year.
