Goldman Sachs expects oil prices to stabilize at $76 a barrel next year

Goldman Sachs expects oil prices to average $76 a barrel in 2025 based on a moderate surplus of crude and excess capacity among major producers as concerns about a potential disruption to Iranian supplies recede.

The bank said in a note that risks remain in the medium term, putting prices in a range of $70 to $85 a barrel, which is debatable although slightly bearish, as the risks of falling prices due to high excess capacity and possible broader trade tariffs outweigh the factors leading to higher prices, adding that there is a possibility of higher prices by the end of the year.

Analysts at Goldman Sachs considered that despite the global surplus capacity and the continued large Iranian production that has not been interrupted so far, the belief is that the surplus of supply by 2025 is a foregone conclusion. They added that the geopolitical risk premium is limited, in light of the lack of impact of the tension between Israel and Iran on oil supplies from the region, and that surplus capacity is high among producers in the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and its allies.