Goldman Sachs released a deep-dive commodities report on July 27, laying out three clear oil-price scenarios, covering the full range from a baseline neutral outcome to an extreme upside. The report’s core conclusion is that the risk of oil prices rising is significantly greater than the room for downside; in the short term, summer inventory drawdowns will support oil prices trading at elevated levels. In an extreme upside backdrop, shipping through the Strait of Hormuz remains disrupted until 2027, and Brent is expected to break above $120 in Q4.
Complete data for Goldman’s three oil-price scenarios
According to Goldman’s July 27 report, the specific forecast data for the three scenarios are as follows:
Baseline neutral: Brent at $80 in 2026 Q4, WTI at $76; Brent at $75 and WTI at $70 for the full-year 2027 average; global supply-demand surplus of 3.2 million barrels per day in 2027
Moderate upside (Strait of Hormuz disruption): If the disruption continues until 2027 and Gulf production capacity can only be fully restored by the end of 2027, then Brent breaks above $120 in 2026 Q4 and the 2027 average stands above $100. Assuming the volume of shipments transiting through the Strait of Hormuz falls to 5% of normal capacity during the disruption (for six weeks), restoration requires an additional month.
Double layering (simultaneous blockade of the Strait of Mandeb and the Suez Canal): On top of the basic upside scenario, add a further $25; the Brent extreme upside scenario points to $145.
Downside floor: If global supply surges beyond expectations and energy demand continues to shrink, Brent could potentially fall as low as $60 by the end of 2027 (Goldman says the probability of this scenario is relatively low).
Brent plunges 6% to $91 on July 27
Based on market data, when trading opened on July 27, Brent crude was briefly down 6% to around $91 per barrel, and WTI crude fell below $84 per barrel. The reason was that the U.S. announced over the weekend that it would pause strikes against Iran, and traders quickly priced in the ceasefire signal.
Prior to that, Brent crude had risen by more than 12% week-over-week over the past week, nearing $100 per barrel. Factors behind the rise included: continued attacks by the Houthis on oil tankers transiting the Red Sea; production cuts by Middle East oil-producing countries being carried out; and multiple commodities reports from investment banks such as Goldman Sachs that analyzed and broke down the geopolitical premium.
Goldman’s new view: a structural risk premium, with rising global capacity concentration increasing long-term uncertainty
In its report, beyond the three scenarios, Goldman also pointed to a structural shift: global crude oil production capacity and spare capacity are highly concentrated in a small number of countries, and this concentration trend will drive a higher risk premium over the longer term. Analysts said this dynamic is expected to encourage governments to increase strategic reserves.
FAQ
What are the three oil-price scenarios in Goldman Sachs’ July 27 report?
According to Goldman’s report, the three scenarios are: ① baseline neutral (Brent at $80 in 2026 Q4); ② extreme upside (Strait of Hormuz disruption until 2027, Brent breaking above $120 in Q4, with double blockade potentially topping out at $145); ③ downside floor (Brent’s lowest possible level by end-2027 could be as low as $60, and Goldman says the probability is relatively low).
What is Goldman’s baseline forecast for Brent crude in 2027?
Under Goldman’s baseline neutral scenario, assuming normal navigation through the Strait of Hormuz, Brent crude’s full-year average in 2027 is $75, and WTI’s average is $70. In the same year, the global supply-demand surplus is 3.2 million barrels per day.
Why did oil prices plunge on July 27?
According to market coverage, on July 27 Brent crude opened sharply lower, down 6% to about $91, because the U.S. announced over the weekend that it would pause strikes against Iran, and traders quickly digested the ceasefire signal.
