Goldman Sachs analysts on Monday warned that in a worst-case scenario, Brent oil, the international benchmark prices, could fall below $40 a barrel.
Brent crude oil futures are currently trading around $64 a barrel, while US West Texas Intermediate futures are at approximately $60 a barrel, with both prices down by about 15% this year.
Goldman Sachs’ base-case forecast expects Brent to reach $55 and WTI to hit $51 per barrel by December 2026.
This outlook assumes the US avoids a recession and that OPEC’s supply increases moderately.
“In a more extreme and less likely scenario with both a global GDP slowdown and a full unwind of OPEC+ cuts, which would discipline non-OPEC supply, we estimate that Brent would fall just under $40 a barrel in late 2026,” they wrote.
In the event of a “typical” US recession, the investbank bank forecasts Brent crude to fall to $58 a barrel by December 2025 and $50 by December 2026.
Oil prices are highly sensitive to macroeconomic shifts, as energy is a crucial input for nearly every industry.
Goldman Sachs’ under-$40 forecast follows a sharp 7% drop in oil prices on Thursday, triggered by US President Donald Trump’s new round of tariffs and OPEC+’s unexpected decision to increase supply.
This led to continued declines, with prices reaching four-year lows on Monday.
“What we’re seeing in oil prices reflects the fundamental interconnectedness of energy and economic systems. Increased production combined with growing concerns about global economic growth has shifted market psychology from scarcity to surplus,” wrote Angie Gildea, the US energy leader at KPMG, on Monday.
