Goldman Sachs Oil Price Forecast

(Reuters) – Goldman Sachs expects oil prices to average $76 a barrel in 2025 due to moderate crude surplus and spare capacity among major producers. Concerns over potential disruptions in Iranian supply are easing, according to a note on Tuesday.

Overall, Goldman sees medium-term risks to the $70-85/bbl range as balanced but slightly tilted downwards. The analysts believe that potential price pressures from high spare capacity and broader trade tariffs may outweigh any upside risks.

The investment bank also suggests that prices could increase towards the end of the year. They observe that Brent time spreads are "underpricing physical tightness somewhat."

Despite significant global spare capacity and stable production from Iran, Goldman does not consider a 2025 supply glut to be certain. They note that the geopolitical risk premium remains limited, as tensions between Israel and Iran have not impacted regional oil supply, and available capacity among OPEC+ producers remains high.

Nevertheless, supply risks will linger as the Middle East conflict continues, which could further tighten oil balances.

Oil prices rose again on Tuesday, marking the second consecutive session of gains, with Brent futures priced at $76.04. Traders are downplaying hopes for a ceasefire in the Middle East, shifting focus to improving demand signals from China.