Goldman Sachs cuts second-quarter 2026 oil price forecast after Iran ceasefire
Synopsis
Goldman Sachs trims oil price forecasts for second-quarter of 2026 as ceasefire eases supply risks, though upside risks remain.
Goldman Sachs has lowered its second-quarter 2026 oil price forecasts after the US-Iran ceasefire eased supply risks, with Brent and US crude projections trimmed amid signs of improving flows through the Strait of Hormuz.
Key highlights
- Goldman Sachs cuts Q2 2026 Brent forecast to $90 per barrel
- WTI forecast lowered to $87 per barrel
- Ceasefire reduces geopolitical risk premium in oil markets
- Brent prices fall over 11% this week
- Upside risks remain if supply disruptions persist
- Gas price forecasts also revised lower amid LNG flow expectations
Forecast revisions signal easing supply fears
Goldman Sachs now expects Brent crude to average $90 per barrel in the second quarter of 2026, down from its earlier estimate of $99.
US West Texas Intermediate (WTI) is forecast at $87 per barrel, compared to the previous $91 estimate.
The downgrade reflects a reduction in geopolitical risk premiums and early signs that oil flows through the Strait of Hormuz are stabilising.
Ceasefire drives sharp market reaction
Oil prices have reacted quickly to the easing tensions.
Brent crude has dropped more than 11% this week as markets price in the possibility of a reopening of the key shipping route.
However, prices edged higher again on Thursday amid uncertainty over whether the ceasefire will hold and whether full supply can resume.
Longer-term outlook remains unchanged
Despite the near-term downgrade, Goldman Sachs maintained its broader outlook.
- Q3 forecast: $82 for Brent, $77 for WTI
- Q4 forecast: $80 for Brent, $75 for WTI
The bank said the overall trajectory remains stable, assuming gradual normalisation in global supply conditions.
Upside risks still dominate outlook
Goldman warned that risks to oil prices remain tilted to the upside.
In a worst-case scenario involving prolonged disruptions and production losses of around 2 million barrels per day, Brent crude could average closer to $115 per barrel in the fourth quarter.
This reflects ongoing uncertainty around Middle East supply stability.
Gas market outlook also revised
The bank also lowered its forecast for European gas prices.
The benchmark TTF gas price is now expected to average 50 euros per megawatt-hour in the second quarter, down from the previous 70 euros forecast.
This revision is based on expectations of gradual recovery in LNG flows through the Strait of Hormuz.
However, Goldman warned that delays or infrastructure damage could push gas prices above 75 euros per megawatt-hour.
Australia angle: Energy costs and LNG flows in focus
For Australia, the revised outlook is major given its role as a major LNG exporter.
Stabilising global gas flows could ease volatility in export markets, but prolonged disruptions in the Middle East may continue to influence pricing dynamics and contract negotiations for Australian energy firms.
What next?
Markets will closely track developments around the ceasefire and the reopening of the Strait of Hormuz.
Any signs of renewed conflict or supply disruption could quickly reverse recent price declines.
Investors will also monitor global energy demand trends and LNG flows for further direction.
FAQs
Q1: Why did Goldman Sachs cut its oil price forecast?
The bank cited reduced geopolitical risk after the US-Iran ceasefire and early signs of improving oil supply flows.
Q2: What are the new oil price forecasts?
Brent is expected at $90 and WTI at $87 per barrel for Q2 2026.
Q3: Are oil prices expected to rise again?
Yes, Goldman Sachs said risks remain skewed to the upside if supply disruptions persist.
Q4: What is the outlook for gas prices?
European gas prices are expected to fall, but could rise again if LNG supply is disrupted.
Q5: Why does this matter for Australia?
Australia’s LNG exports are sensitive to global supply disruptions and pricing trends, especially in Asia-Pacific markets.
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