Goldman Sachs predicts oil crash to low $50s by 2026

Goldman Sachs has issued a stark forecast for global oil markets, predicting Brent crude prices will plummet to the low $50s per barrel by late 2026.

The investment bank cites a massive global oil surplus that could near 800 million barrels by the end of next year as the primary driver of this decline.

The predicted oil surplus is expected to average 1.8 million barrels per day from the fourth quarter of 2025 through the same period in 2026.

This aligns with the International Energy Agency's expectation of a record inventory buildup of 2.96 million barrels per day, exceeding supplies recorded during the 2020 pandemic.

Why is Goldman Sachs forecasting a drop in oil prices?

The forecast reflects a widening supply-demand imbalance with OPEC+ accelerating production, undoing voluntary cuts made in 2023.

Eight OPEC+ members agreed to increase output by 547,000 barrels per day for September, contributing to rising global supply.

Did you know?
OECD countries are predicted to hold nearly one-third of global oil inventories by 2026, totaling around 270 million barrels.

How is supply outpacing demand in the oil market?

Global supply growth, led by OPEC+ and non-OPEC producers like the United States, Brazil, and Canada, is projected to add 2.0 million barrels per day in the latter half of 2025.

Meanwhile, demand growth is sluggish, with the IEA forecasting the lowest annual gains since 2019.

What regional factors contribute to oil inventory buildup?

OECD countries are expected to store 270 million barrels of oil by 2026, contributing to excess inventories.

Although China remains the world’s largest oil importer, the mixed demand signals and limited increases in its reserves limit price support.

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What might influence price deviations from the forecast?

Goldman Sachs notes that if China doubles its strategic reserve build rate, Brent prices could uplift by about $6, reaching near $62 per barrel in 2026.

Despite such potential, overall downward pressure from sustained surplus and moderate demand is expected to dominate.

The forecast highlights the most challenging oil market conditions in years, with significant consequences for energy revenues and geopolitical dynamics as oil-dependent nations adapt to a lower price environment.