Goldman Sachs has adjusted its December forecast for Brent crude oil to $105 per barrel, marking a 17% increase from its previous October estimate of $90. Despite this upward revision, the new target remains approximately 5% lower than the market price of $110.40 recorded on November 2. Similarly, the bank’s forecast for WTI crude stands at $94, which is below the current market price of $101.06.
The bank attributes this adjustment to heightened supply disruption risks stemming from conflicts in the Middle East and between Russia and Ukraine. Analysts now incorporate a global supply disruption allowance of 1 million barrels per day into their 2027 base case. Goldman Sachs notes that the timing and specific locations of these potential disruptions remain difficult to predict, contributing to a higher risk premium in the markets.
Other financial institutions also maintain conservative outlooks. JPMorgan recently estimated the fair value of Brent at $94, significantly lower than the market price of approximately $114 observed last week. Analysts suggest that this discrepancy is primarily driven by geopolitical risk, often referred to as a war premium. Historically, such price gaps exceeding 5% above fair value have persisted for an average of 3.8 months.
Forecasts for 2027 show greater divergence among analysts. BMI, a research unit of Fitch Solutions, projects an average Brent price of $81 for 2027, which is lower than the $88 forecast by Goldman Sachs. BMI anticipates a potential decline in prices to an average of $67 by late 2027, contingent on a diplomatic resolution regarding the Strait of Hormuz, which the firm does not expect before the first quarter of 2027.
