Goldman Adds 17% to Its Brent Call: Is It Actually Bullish?

Goldman Sachs lifted its December Brent crude forecast to $105 per barrel on high supply disruption risk. The new call sits 17% above its October estimate of $90.

Brent traded at $110.40 on November 2, so even the raised target sits about 5% below the market. WTI shows a similar gap, with the bank’s $94 forecast trailing the current $101.06. 

For traders holding crude, Goldman’s higher call still implies the oil price easing by December.

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Goldman Now Plans for Disruptions That Are Hard to Time

Goldman tied the upgrade to supply risks from two separate conflicts. Analysts led by Daan Struyven laid out the case in a note, CNBC reported.

“The Mideast and Russia-Ukraine conflicts, alongside broader geopolitical fragmentation, create high disruption risk,” the bank wrote.

As a result, Goldman’s 2027 base case now includes a global supply disruption allowance of 1 million barrels per day. The bank said the timing and location of such disruptions are nearly impossible to predict.

Goldman said markets are pricing a higher risk premium, as many traders expect a lasting diplomatic breakthrough to be difficult. Last week, Iran claimed mines struck four tankers near the Strait of Hormuz, a claim US forces disputed.

That marks a change from mid-October. Back then, Goldman’s base case had Middle East supply adapting and eventually pulling prices lower.

How Long Can Oil’s War Premium Last?

Other analysts also value Brent below today’s price. Last week, JPMorgan’s model put Brent’s fair value at $94, against a market price near $114.

JPMorgan’s analysts could not link the difference to shipping costs. That leaves geopolitical risk as the more probable driver. Analysts often call that gap oil’s war premium. Historically, stretches more than 5% above fair value lasted 3.8 months on average.

Forecasters Agree on December, Then Split on 2027

The near-term forecasts sit close together, but the gap widens for next year. BMI, the research unit of Fitch Solutions, expects Brent to average $107 this quarter.

For 2027, BMI projects an $81 average, below Goldman’s $88. BMI does not expect a Hormuz deal before the first quarter of 2027. Once one lands, it sees a steep drop, with Brent averaging $67 by late 2027.

A decision on Iran, or progress toward a Hormuz deal, would show which 2027 forecast traders price in first.

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