Goldman Sachs has lowered its second-quarter 2026 price forecasts for Brent crude to $90 a barrel and U.S. crude to $87 a barrel. This adjustment follows a two-week ceasefire agreement between the U.S. and Iran. Previously, the bank had predicted Brent and West Texas Intermediate (WTI) to average $99 and $91 per barrel, respectively.
The bank cited a reduced risk premium at the front of the curve and increasing oil flows through the Strait of Hormuz as reasons for the forecast revision. Brent crude prices have seen a significant decline this week amid hopes of the Strait of Hormuz reopening after the U.S. President's ceasefire agreement with Iran.
However, prices saw an uptick in early Asia trading due to concerns about potential supply disruptions from the Middle East, given doubts about the ceasefire's longevity and continued restrictions in the crucial strait.
Goldman Sachs' forecasts for the third and fourth quarters of 2026 remain at $82 and $80 for Brent, and $77 and $75 for WTI. The bank noted that risks to these forecasts are skewed to the upside, anticipating potential for prolonged disruptions and crude production losses. In a worst-case scenario, if the ceasefire fails and Middle East production losses reach two million barrels per day, Brent could average closer to $115 in the fourth quarter.