Goldman Sachs lowers Q2 oil forecasts amid Iran ceasefire

GOLDMAN SACHS GROUP INC has lowered its oil price projections for the second quarter of 2026, citing a reduction in geopolitical risk following a ceasefire agreement between the United States and Iran. The financial institution adjusted its forecasts for Brent Crude Oil to $90 per barrel and West Texas Intermediate (WTI) to $87 per barrel, down from previous estimates of $99 and $91, respectively.

Given the reduction in the risk premium at the front of the curve and already edging up oil flows through the SoH (Strait of Hormuz), we nudge down our Q2 forecast for Brent/WTI, the bank said in a note.

The market has reacted sharply to the news, with Brent prices falling more than 11% this week on expectations that the Strait of Hormuz will see normalized traffic after President Donald Trump agreed to the two-week truce. However, prices saw a modest increase during the early Asian session on Thursday as investors weighed the fragility of the ceasefire and the fact that the crucial waterway remains under certain restrictions.

For the latter half of 2026, the bank's outlook remains more conservative, with Brent forecasts at $82 for the third quarter and $80 for the fourth quarter. WTI is projected to average $77 and $75 during the same periods. Despite the recent price drop, the bank noted that risks to these forecasts are primarily skewed to the upside, particularly if Middle Eastern production faces long-term disruptions.

In a severe case where the ceasefire doesnt hold and with persistent Middle East production losses of around 2 million barrels per day, Brent could average closer to $115 in the fourth quarter, the bank said.