Goldman Projects Oil Prices to Stabilize at $76 in Supply-Balanced 2025

Goldman Sachs forecasts that oil prices will average $76 per barrel in 2025. This projection is based on expectations of a moderate crude oil surplus and the availability of spare capacity among major oil producers. The investment bank's outlook, detailed in a note released on Tuesday, suggests that concerns over a potential disruption in Iranian oil supply have diminished.

The bank's analysts maintain a medium-term oil price range of $70 to $85 per barrel while acknowledging risks that could impact prices in either direction. However, they emphasize that the risks are moderately skewed to the downside. Factors such as high spare capacity and the potential for broader trade tariffs are cited as possible downward pressures on oil prices.

Despite significant global spare capacity and uninterrupted oil production from Iran so far, Goldman analysts do not foresee a surplus in 2025. They also note that geopolitical risks, which typically add a premium to oil prices, are currently limited. Tensions between Israel and Iran have not affected oil supply, and the OPEC+ group, including the Organization of the Petroleum Exporting Countries and its allies, possesses substantial spare capacity.

Regarding supply risks, analysts acknowledge the potential for disruptions that could tighten oil balances as long as conflicts in the Middle East remain unresolved. Nevertheless, the geopolitical risk premium on oil prices remains constrained.

In the short term, oil prices have shown an upward trend, with Brent futures closing at $76.04 per barrel on Tuesday, marking the second consecutive session of gains. Market sentiment appears to be influenced by expectations of improved demand from China and skepticism about a ceasefire in the Middle East.