Goldman Sachs Warns Brent Crude Oil Could Fall Below $40 In 'Extreme' Conditions

Goldman Sachs, after revising its oil forecasts twice within a week, stated that under “extreme” conditions—such as escalating trade tensions and increasing supplies—Brent crude could potentially drop below $40 per barrel. “In a more extreme and less likely scenario with both a global GDP slowdown and a full unwind of OPEC+ cuts, which would discipline non-OPEC supply, we estimate that Brent would fall just under $40 a barrel in late 2026,” analysts including Yulia Grigsby wrote in an April 7 note, according to a Bloomberg’s report.

However, this outlook does not reflect the bank’s current base-case scenario, which projects Brent at $55 per barrel in December 2026.

The global oil market has faced significant turbulence in recent sessions due to the Trump administration’s intensification of the trade war, coupled with pushback from major economies like China. This has heightened recession risks and created headwinds for energy demand. Simultaneously, OPEC+ has shifted its stance, returning to production levels higher than previously anticipated after a prolonged period of supply cuts, the report added.

Major Banks' Prediction On Oil Prices

In response to these developments, major banks such as Goldman Sachs, Morgan Stanley, and Societe Generale SA have revised their base-case oil price forecasts. They’ve also examined less likely bullish and bearish scenarios, a common practice in commodity forecasting to account for a range of potential outcomes under varying conditions.

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