Goldman Sachs Lowers Oil Price Forecasts After Hormuz Strait Reopening Deal

Goldman Sachs has reduced its forecast for Brent crude oil prices in the fourth quarter of the year from $90 to $80 per barrel. The bank also lowered its estimate for the average price in 2027 from $80 to $75 per barrel. This revision follows a preliminary agreement between the United States and Iran to reopen the Strait of Hormuz.

In a research note released late Monday, analysts at the investment bank indicated they now expect Gulf exports to return to pre-war levels by the end of July, a month earlier than their previous forecast of the end of August.

Oil prices declined on Tuesday, continuing a drop of about 5% to the lowest levels since March 10. This came after U.S. President Donald Trump announced the signing of a memorandum of understanding aimed at ending the U.S.-Israeli war with Iran, which had led to the closure of the Strait of Hormuz.

Before the conflict, the strait accounted for about one-fifth of global oil and liquefied natural gas supplies.

Brent crude futures fell 0.3% to $82.94 per barrel, while U.S. West Texas Intermediate (WTI) futures decreased 0.1% to $80.66 per barrel. Goldman Sachs expects WTI to average $75 per barrel in the last quarter of this year and $70 per barrel in 2027.

The bank also anticipates a somewhat stronger recovery in demand during the second half of 2026 and into 2027, supported by improved purchasing power.

Goldman Sachs highlighted two main risks affecting oil supply forecasts from the Middle East. On one hand, Gulf oil exports could return to pre-war levels, implying an increase of 12 million barrels per day in flows through the Strait of Hormuz compared to current levels.

On the other hand, the analysts warned that renewed hostilities and attacks on ships in the region could keep exports and production at reduced levels for a longer period. Additionally, the removal of any mines in the area could require a significant amount of time.