Goldman Sachs expects oil prices to decline through the end of 2025 and into 2026, with Brent (CO1:COM) and WTI (CL1:COM) averaging $63 and $59 per barrel, respectively, this year and falling to $58 and $55 next year, due to rising recession risks and increased OPEC+ supply.

The bank projects oil demand will increase by just 300,000 barrels per day between the end of 2024 and the end of 2025, amid a weak growth outlook driven by a global trade war.

Due to the escalating trade tensions between the U.S. and China, the bank has lowered its global oil demand growth forecast for the fourth quarter of 2026 by 900,000 barrels per day since mid-March. China on Friday announced an increase in tariffs on U.S. goods to 125%, up from the previous rate of 84%, effective April 12.

Goldman Sachs predicts that even with some future inventory builds already factored in, substantial surpluses of 800,000 barrels per day in 2025 and 1.4 million barrels per day in 2026 will keep oil prices under pressure.

West Texas Intermediate (CL1:COM) crude futures was up +0.16% to $61.60 at the time of writing, while Brent crude (CO1:COM), the international benchmark, was +0.06% at $64.80 a barrel and has declined over 13% YTD.

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