Goldman Sachs Slashes Oil Forecasts Again, Warns Of $40 Brent In ‘Extreme’ Tariff-Driven Recession Scenario

After having cut its oil forecasts twice in less than a week, analysts at Goldman Sachs cut their annual forecasts for Brent and West Texas Intermediate Crude for 2025 and 2026 yet again, warning of a worst-case scenario involving a tariff-driven global recession and higher supply by the OPEC+ nations.

What Happened: On Monday, Goldman Sachs once again revised its annual forecasts for Brent and WTI crude prices at $62 and $58 a barrel for December 2025 and $55 and $51 for December 2026, respectively, reported Bloomberg. At the time of writing this, crude oil trades at $64 Brent and $60 WTI.

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This downward revision remains in line with the firm’s earlier decision to raise the probability of a recession in the U.S. to 45% over the next 12 months, up from 35% early last month, in response to the intensifying global trade war that can plunge the world into a recession.

It further adds in the note that these forecasts have been made under two assumptions, the first being that the U.S. economy avoids a recession, with a significant reduction in the proposed tariffs. Second, the supply from the Organization of the Petroleum Exporting Countries (OPEC+) rises moderately with two increments of 130,000 to 140,000 barrels.

In a more “extreme” scenario, where a global recession aligns with a full OPEC+ unwind, which the bank says is “less likely,” Brent could fall just below $40 a barrel in late 2026, a level not seen since the COVID-19 pandemic.

Why It Matters: After starting April at $70 a barrel, NYMEX WTI prices dipped below $60 on Monday morning, a level not seen in four years, before rebounding in the afternoon at $60.70. Energy analysts see the $60 mark as a key threshold, below which most producers will scale back their activity.

According to Marshal Adkins, the head of energy at Raymond James Financial Inc RJF, oil prices below $60 will push the U.S. into a slowdown, ‘there is no question about it,’ he adds while speaking to Fortune.

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