Goldman Sachs lowered its oil price forecast, emphasizing that the expectation of "surplus supply" will continue to exert pressure on Crude Oil prices.
According to Zhito Finance APP, Wall Street financial giant Goldman Sachs has once again lowered its expectations for international oil prices. The main logic behind this is the ongoing expectation of 'oversupply' in the Crude Oil market this year, along with the global demand for Crude Oil being much weaker than previously expected due to the tariff storm led by the Trump administration.
The bank currently expects that for the remaining time in 2025, the benchmark curve for international Crude Oil prices — the average price of Brent Crude will be $63 per barrel, and the average price of Crude Oil Product is expected to be $59 per barrel. Goldman Sachs has further lowered its oil price forecast for 2026, with the average price of Brent Crude significantly reduced to $58 per barrel, and the average price of Crude Oil Product expected to decrease to only $55 per barrel.
As of the time of writing, the price of Brent Crude futures is hovering around $64.5, with a decline of approximately 0.3% during Monday's Asian trading session; the price of Crude Oil Product futures is hovering around $61.5, with a decline of about 0.24% during the Asian trading session.
Since Trump launched a new round of global trade wars, the international Crude Oil price has experienced a sharp decline for most of the past week. The North American Crude Oil price benchmark — Crude Oil Product has already fallen below the crucial breakeven line of $65 per barrel, which is the breakeven point for many USA Shale Oil companies developing new oil wells. This has caused deep unease among USA Oil & Gas drillers and has even stirred up resentment among some oil and gas operators who had strongly supported Trump.
In terms of international oil prices, since Trump announced the aggressive 'reciprocal tariff' policy aimed at the world in April, the global benchmark price for Crude Oil — Brent Crude has fallen by nearly 20%. During the week ending April 4, the international Crude Oil market experienced the most severe fluctuations since 2021, with both Brent and USA Crude Oil Product hitting their largest weekly declines in over two years.
For the Crude Oil market, a relatively positive message is that Trump announced last Wednesday that the US government will delay the implementation of the so-called 'reciprocal tariffs' imposed on most countries by 90 days (less than 24 hours from announcement to effect). However, most countries worldwide still face at least a 10% tariff on imported goods. Some optimistic Commodity Analysts have stated that this move by the Trump administration has somewhat alleviated market concerns about economic shocks potentially suppressing Energy demand.
This means that although President Trump has stated he authorized a 90-day delay on 'reciprocal tariffs' for most countries, tariffs of around 10% will still be imposed during this period. Tariffs on imported goods from China have greatly increased to 145% due to the countermeasures from Peking this week.
The latest oil prices and demand expectations have been significantly lowered, reflecting Goldman Sachs' view that under the heavy pressure of Trump's tariffs, Global Crude Oil demand will face a historic setback. Goldman Sachs has greatly intensified its expectations for oversupply in the Crude Oil market — the market is expected to have a surplus of up to 0.8 million barrels per day (mb/d) in 2025, and a surplus of up to 1.4 million barrels per day in 2026. The bank also stated that these surplus pressures will continue to exert strong pressure on Brent Crude Oil and Crude Oil prices.
Goldman Sachs' viewpoint aligns with expectations from Wall Street financial giants such as Bank of America and Morgan Stanley, all predicting a significant "supply surplus" in the Crude Oil Product market in 2025 and 2026.
Goldman Sachs expects that Global Crude Oil demand will show only moderate growth — projecting a year-on-year increase of only 0.3 million barrels per day in the fourth quarter of 2025, which means that under increasingly strong supply conditions, the downward pressure on Crude Oil Futures prices will further intensify.
As Goldman Sachs releases its latest Crude Oil market forecast, the Global Energy Trade market is fully adapting to the significantly slowed growth in Global Crude Oil demand under the extremely aggressive tariff policies of the Trump administration, the substantial expansion of OPEC+ oil-producing countries' capacities, and the constantly changing geopolitical dynamics.
BP PLC, the UK-based energy giant, in its latest earnings warning statement, indicated a significant increase in debt for the first quarter, which is another setback for this UK energy giant striving to improve its financial situation. During this period, due to the soft trend in oil prices combined with the overall decline in the company's upstream production, along with Henry Hub Natural Gas trading performance being much weaker than expected. BP PLC stated in its earnings warning guidance that oil production and business operations showed a "slight increase" in the first quarter, but the continued weakness in Crude Oil prices and the decline in Natural Gas and low-carbon energy production dragged down overall production and performance data.
Editor/Lee
