Goldman Sachs said it expects oil prices to average $76 a barrel in 2025 based on a moderate surplus of crude and spare capacity among major producers as concerns about a potential disruption to Iranian supplies ease.
“Overall, we continue to view the medium-term risks to our $70-$85 per barrel price range as debatable but slightly tilted to the downside, with downside risks from high excess capacity and potentially broader trade tariffs outweighing the bullish factors,” Goldman Sachs added in a note on Tuesday.
The investment bank said there was a possibility of prices rising by the end of the year.
Despite significant global spare capacity and Iran's oil production that has not been cut off so far, we do not believe a supply overhang by 2025 is a foregone conclusion, Goldman Sachs analysts said.
They added that the geopolitical risk premium is limited, as tensions between Israel and Iran have not affected oil supplies from the region, and spare capacity is high among producers in the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and its allies.
However, supply risks will persist if the conflict in the Middle East remains unresolved, and potential disruptions could tighten oil balances.
Oil prices rose for a second straight session on Tuesday, with Brent futures hitting $76.04 a barrel as traders played down hopes of a Middle East ceasefire and focused instead on signs of improving demand from China.
