Goldman Sachs Forecasts Brent Crude Price Range Amid Ongoing U.S.-Iran Conflict

Goldman Sachs has forecasted that Brent crude will trade between $80-$90 per barrel until there is either confirmation of a new U.S.-Iran nuclear deal or a significant escalation of their conflict. The bank estimates spot Brent's fair value at about $80 a barrel, suggesting markets are pricing in only a modest risk premium despite ongoing uncertainty over Middle East oil supplies.

Brent crude traded near $85 per barrel on Tuesday as conflicting signals from the U.S. and Iran over the status of talks to end their five-month-old war sowed uncertainty. The bank notes that physical oil markets continue to tighten, with global visible oil inventories falling by 6.3 million barrels per day over the past two weeks.

Goldman Sachs attributed the decline in global oil inventories to reduced flows from the Gulf and Red Sea, lower Russian exports, and stronger Asian imports. The bank also highlighted a recent drop in Saudi oil exports, which are down 2.4 million barrels per day from a year earlier, although shipments have increasingly been rerouted through Egypt's SUMED pipeline.

The U.S.-Iran conflict has disrupted global oil supplies, with the bank estimating Gulf oil exports have fallen to about 36 percent of pre-war levels on a seven-day moving average basis. Loaded tanker capacity in the Red Sea has dropped 22 percent since the Iran-aligned Houthis announced a blockade.