Goldman Sachs has warned that Brent crude could drop below $40 a barrel by late 2026 in an extreme scenario. While this isn’t their base-case forecast, it reflects mounting concerns about global economic risks and rising oil supply.
Trade war and OPEC+ shift raise risks
Tensions have flared with the Trump administration’s escalating trade war, sparking fears of a global slowdown. At the same time, OPEC+ has unexpectedly increased supply, easing past their earlier production cuts. Both developments are weighing on oil market sentiment.
Revised forecasts reflect cautious outlook
Goldman’s new base-case estimate sees Brent at $58 per barrel by December 2025, falling to $50 by the end of 2026. That’s down from previous forecasts, as the bank factors in a potential U.S. recession and more aggressive supply from oil producers.
Volatility is back in oil markets
Though Brent is currently around $65 a barrel, the recent drop to a four-year low highlights how volatile oil prices have become. While a sub-$40 scenario is unlikely, it’s not off the table. Traders and investors should be prepared for a wide range of possible outcomes in the coming years.
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