Global investment bank Goldman Sachs has lowered its oil price forecast for 2027, citing expectations of stronger global crude supply and weakening demand growth, particularly from China, where the transition to electric vehicles and alternative transportation is accelerating.
The revised outlook comes as crude prices continue to retreat from recent highs triggered by tensions in the Middle East.
According to the bank, Brent crude is now expected to average $80 per barrel in 2027, reflecting expectations of increased production from major non-OPEC suppliers and slower growth in global oil consumption. Analysts noted that China’s growing adoption of electric vehicles, expansion of rail transport and broader energy diversification are beginning to reduce demand for conventional fuels.
Goldman Sachs estimates that China's consumption of gasoline and related petroleum products may have declined by as much as 20 per cent year-on-year in April, reinforcing concerns that the country's role as a key driver of global oil demand growth is gradually weakening.
The bank also expects additional crude supplies from the United States, Brazil, Guyana, the United Arab Emirates and Venezuela to contribute to a more balanced market over the coming years, potentially limiting further price gains if geopolitical tensions ease.
Despite the bearish outlook, Goldman Sachs warned that risks remain elevated. The bank said any prolonged disruption to shipping through the Strait of Hormuz could tighten global supplies and push Brent crude above $110 per barrel later this year. In a more severe scenario where disruptions persist into 2027, prices could climb as high as $140 per barrel.
However, if crude exports through the strategic waterway normalise sooner than expected, analysts believe Brent could retreat towards $70 per barrel by the end of 2026 and fall further to around $60 per barrel in 2027.
The latest forecast highlights the growing influence of long-term demand shifts on the oil market, even as traders remain focused on geopolitical developments across the Middle East. While supply risks continue to support prices in the short term, slowing demand growth and rising production outside OPEC are increasingly shaping expectations for the years ahead.