Goldman Lifts Brent Forecast to $105 as Supply Risks Build

Goldman Sachs has raised its year-end Brent forecast to $105 a barrel, up $15 from its previous estimate of $90, and now expects the global benchmark to average $88 in 2027 — a 10% increase on its earlier view. The Nov. 1 note, written by analysts including Daan Struyven and Yulia Zhestkova Grigsby, also lifted the bank's forecasts for US marker West Texas Intermediate.

The revision places Goldman alongside a cluster of banks that have turned more bullish after months of war in the Middle East. Morgan Stanley recently raised its forecast for Dated Brent — a key physical price — to $105 a barrel for the fourth quarter, while ANZ Group Holdings lifted its year-end Brent futures outlook to the same figure. Most-active contracts slipped below $110 in Monday's trading.

"Substantial downside supply risks are likely to sustain a large, near-term risk premium," the Goldman analysts wrote. Markets, they added, are assigning "increasing weight to escalation after the Nov. 3 US midterms and subsequent potential weakness in Mideast supply."

Why are prices climbing despite ample barrels?

Brent rallied 14% in October and touched a six-month high, even as crude flows from the Middle East rebounded close to pre-war levels. The disconnect between physical supply and price points to fear rather than shortage. Traders are bracing for a renewed flare-up between the US and Iran after the midterm elections, with President Donald Trump repeatedly hinting he may resume airstrikes. Iran's supreme leader, for his part, has ordered his top commanders to prepare for renewed confrontation.

Goldman flagged two triggers that could push prices higher still: intensified attacks on shipping and damage to infrastructure. The bank also cited continuing risks stemming from Russia's invasion of Ukraine. "With the timing and location of disruptions nearly impossible to predict, our base case now includes a 1-million-barrel-per-day global supply disruption allowance in 2027," the analysts wrote.

What are the upside and downside scenarios?

Beyond its core view, Goldman sketched bullish and bearish frameworks for 2027 spanning a range of roughly $70 — a spread that lays bare the difficulty of forecasting in the current environment.

• Bull case: Brent averages $130 next year if Persian Gulf output stays 3.5 million barrels a day below last year's average.
• Bear case: A faster recovery in regional output could pull futures "into the $60s," the analysts wrote.

A $70-wide forecasting band has direct consequences for freight markets. Bunker fuel tracks crude closely, so a move toward the $130 scenario would lift vessel operating costs and likely feed into surcharges on tankers and container lines alike. A slide into the $60s, conversely, would ease fuel-linked surcharges that shippers have carried through the autumn.

What does this mean for carriers and shippers?

For tanker owners, the risk premium embedded in crude prices tends to arrive with the threat, not the barrels — Middle East supply has already rebounded near pre-war levels, yet freight and insurance markets have priced in the possibility of renewed escalation in the Strait of Hormuz and surrounding waters. Container lines routing Asia–Europe services through the region face parallel exposure if shipping attacks intensify, one of the two disruption triggers Goldman names explicitly.

For shippers and forwarders, the practical takeaway is volatility ahead of the Nov. 3 midterms. Goldman's read of the market — that traders are weighting post-election escalation heavily — suggests the current premium persists at least until the political picture clarifies. The bank's decision to hardwire a 1-million-barrel-per-day disruption allowance into its 2027 base case signals it expects the threat environment, not the balance sheet of supply and demand, to set the tone well into next year.