Investment banking giant Goldman Sachs has decided to keep its oil price projections for 2026 unchanged despite observing weaker global demand and reduced supply interruptions that have created balanced market conditions.
The financial institution continues to predict that Brent crude will average $83 per barrel while West Texas Intermediate crude will reach $78 per barrel in 2026. These forecasts depend on the assumption that oil shipments through the Strait of Hormuz will return to normal levels by mid-May. This critical shipping channel handles approximately 20% of global oil and liquefied natural gas transportation.
Oil prices dropped roughly 9% on Friday following reports of progress toward a potential peace agreement, which Goldman analysts believe could accelerate the removal of geopolitical risk premiums and drive prices down in the short term.
Despite these developments, negotiators have not yet reached a permanent peace settlement. President Donald Trump has again indicated the conflict might conclude soon, referencing anticipated weekend discussions with Tehran officials. Iranian Foreign Minister Abbas Araqchi confirmed the strait remains operational after a ceasefire agreement between Israel and Lebanon took effect.
Although oil movement through the Strait of Hormuz continues to face significant restrictions, Goldman warns that downside price risks are growing if Persian Gulf production recovers faster than anticipated. This recovery could be supported by smaller-than-expected production shutdowns and substantial regional storage capabilities.
The bank highlighted notable weakness in oil consumption, especially for petrochemical raw materials and aviation fuel, caused by elevated refined product costs and profit margins that could pressure prices downward.
Early estimates indicate that global demand decreases in early 2026 have exceeded those seen during more severe oil price increases in 2011 and 2022, according to Goldman’s analysis.
The most significant demand reduction has occurred in developing nations across Asia and Africa, where energy consumption typically responds more dramatically to price changes, the bank noted.
