Global oil markets are heading into a prolonged phase of tightness, with Brent crude forecast at $90 per barrel for Q4 2026 and risks skewed sharply higher, as massive supply disruptions in the Persian Gulf drive record inventory drawdowns and a widening supply deficit, according to Goldman Sachs.
“We upgrade our 2026Q4 Brent/WTI forecasts to $90/83 (vs. $80/75 prior) on lower Persian Gulf production,” the report said, adding that normalization of Gulf exports is now expected only by end-June, with a slower recovery in production.
The price outlook comes against the backdrop of an unprecedented supply shock. “We estimate that 14.5 mb/d of Persian Gulf crude production losses are driving global oil inventories to draw at a record 11–12 mb/d pace in April,” Goldman Sachs said, highlighting the scale of disruption hitting global markets.
Lasting effects on market balance
The supply shock is expected to have lasting effects on market balance. The report assumes Gulf production will recover to only 70–90% of lost output by July–December, resulting in cumulative losses of around 1,830 million barrels. It also flags a 0.5 mb/d persistent reduction in Gulf production capacity, even as higher output from Saudi Arabia and the UAE temporarily offsets part of the loss.
As a result, the global oil balance is set to swing sharply. “We assume the market swings from a 1.8 mb/d 2025 surplus to a 9.6 mb/d 2026Q2 deficit,” the report said, underscoring the magnitude of tightening.
At the same time, demand is expected to soften under the pressure of rising prices. “We assume that global oil demand falls on a year-over-year basis by 1.7 mb/d in 2026Q2,” Goldman Sachs said, adding that “even sharper demand losses could be required if the supply shock persists longer.”
Limited supply response from outside middle east
Supply response from outside the Middle East is expected to remain limited. “Our forecast of 2026 global supply ex Gulf is 1.0 mb/d higher than before the Hormuz shock with contributions from Russia (+0.4 mb/d) and the US (+0.3 mb/d),” the report said, indicating insufficient offset to Gulf disruptions.
Goldman Sachs also highlighted the potential for further upside in prices under adverse scenarios. “Adverse scenario: Brent 2026Q4 would average just over $100 assuming Gulf exports only normalize by end-July,” the report said.
In a more severe case, the upside could be sharper. “Severely adverse scenario: Brent 2026Q4 would average at nearly $120… assuming 2.5 mb/d of persistent reduction to Gulf capacity,” it added, noting that this reflects continued constraints on Hormuz flows.
Even under a benign scenario, Brent is expected to remain close to $80 per barrel, indicating limited downside risk.
The report flagged “net upside risks to oil prices” from production shortfalls, high refined product prices and the scale of the ongoing disruption.
With record inventory drawdowns, a widening deficit and constrained supply response, global oil markets are entering a structurally tighter phase, with elevated prices and heightened volatility likely to persist in the near term.