Goldman Flags Upside and Downside Risks to 2026 Oil Price Forecast

Goldman Sachs has flagged both upside and downside risks to its 2026 oil price forecast, citing growing uncertainty around Middle East developments. The bank estimates that reduced flows through the Strait of Hormuz pose a significant upside risk, with oil flows still at just 10% of normal levels.

The United States Navy's blockade on vessels entering or leaving Iranian ports has added to the upside risk, as Iran-associated tankers have accounted for most recent flows through the strait. In contrast, cuts to oil production in the Middle East were lower than Goldman's estimates, skewing prices downwards.

Additionally, the announcement of a U.S.-Iran ceasefire and rising prospects of a near-term peace deal have eased geopolitical risk premiums, putting downward pressure on prices. Global visible oil inventories are drawing down at a slower pace, with estimated draws easing to around 2 million barrels per day from roughly 7 million bpd.

The slowdown in inventory draws may reflect that a growing share of inventory draws are occurring in landed product stocks across non-OECD Asia, or that demand losses may be accelerating. Goldman estimates that naphtha demand in April will decrease by approximately 1.3 million barrels per day compared to February levels, while jet fuel demand is expected to fall by 0.5 million bpd.