Goldman Sachs flags risk of sub-$60 oil by end of 2025

Onome Amuge

Goldman Sachs has issued a forecast predicting a downturn in global oil prices, with Brent crude, which currently hovers around $65 per barrel, expected to fall to $62 a barrel and West Texas Intermediate (WTI) to $58 by December 2025. 

The investment bank further anticipates these benchmarks will decline to $55 and $51, respectively, by the end of 2026, a development closely watched by Nigeria’s oil-dependent economy.

The anticipated price drops, which could impact Nigeria’s revenue streams, are underpinned by specific expectations from Goldman Sachs. The firm’s analysis assumes the U.S. economy will avoid a recession, a view partly based on substantial tariff cuts taking effect, April 9th. 

Furthermore, the forecast factors in a moderate increase in oil production from OPEC+, with two planned additions of 130-140 thousand barrels per day slated for June and July.

However, Goldman Sachs also outlined potential deviations from this central forecast. A sharp reversal in the anticipated tariff reductions, for instance, could lead to oil prices exceeding their current estimates. Conversely, should the U.S. economy enter a typical recession while OPEC+ adheres to its baseline production plan, Brent crude could fall to $58 per barrel by December 2025 and further to $50 by the end of 2026.

Adding to these concerns, Goldman Sachs also projects that a slowdown in global GDP growth could push Brent even lower, to $54 per barrel by December 2025 and $45 by December 2026. 

Senior analyst Yulia Zhestkova Grigsby, pointed out in a note that a comparable price decline could also occur under their baseline GDP forecast if OPEC+ were to fully reverse its current 2.2 million barrel per day production cuts.

Despite this potential for a sharp decline, the analysts believe that oil prices are unlikely to remain below $40 a barrel for an extended period. Their reasoning points to the robust supply response expected from U.S. shale producers at lower price points and the anticipation of a relatively shallow U.S. recession in 2025, underpinned by the current lack of major private sector financial vulnerabilities. 

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