LAGOS — Goldman Sachs has lowered its second-quarter 2026 oil price forecasts for Brent and U.S. crude, citing a significant reduction in the geopolitical risk premium following a surprise two-week ceasefire agreement between the United States and Iran.
In a note to clients late Wednesday, the investment bank trimmed its Brent crude forecast to $90 per barrel, down from a previous estimate of $99. West Texas Intermediate (WTI) forecasts were also adjusted downward to $87 per barrel from $91.
The revision follows a 40-day period of intense regional conflict that had effectively shuttered the Strait of Hormuz, a critical chokepoint for global energy supplies.
Risk Premium Recedes
Goldman analysts, led by Daan Struyven, attributed the “nudge down” to the tentative pause in hostilities mediated by Pakistan. The bank noted that oil flows through the Strait are already beginning to edge higher, easing immediate supply fears that had gripped the market since late February.
“Given the reduction in the risk premium at the front of the curve and already edging up oil flows through the [Strait of Hormuz], we nudge down our Q2 forecast,” the bank stated.
The diplomatic breakthrough triggered an immediate market reaction, with Brent crude prices falling approximately 11% this week.
However, the outlook for the remainder of 2026 remains cautious. Goldman maintained its second-half forecasts at:
- Q3: $82 for Brent; $77 for WTI
- Q4: $80 for Brent; $75 for WTI
Upside Risks Persist
Despite the short-term relief, Goldman warned that the market remains “fragile.” Analysts highlighted that if the ceasefire fails and Middle East production losses reach 2 million barrels per day, Brent could spike toward $115 by the end of the year.
The bank’s caution is mirrored across the sector. While Goldman is pricing in a de-escalation, J.P. Morgan continues to project a Q2 average of $100, citing persistent supply tightness, while Macquarie recently warned that a worst-case scenario involving extended conflict could see prices reach $200.
Trading on Thursday saw a slight rebound in prices as market participants questioned the durability of the truce and the extent to which Middle Eastern supply can fully resume while regional tensions remain unresolved.
