Oil Prices Extend Decline as Goldman Cuts 2027 Forecast to $80 a Barrel

Oil prices continued to slide as growing expectations of a potential peace agreement between the United States and Iran eased concerns over energy supply disruptions and weighed on crude markets.

Brent crude fell as much as 5.1%, reaching its lowest level since the early days of the Iran conflict in March, while European natural gas futures dropped by as much as 8.4%.

The market reaction came after reports that Washington and Tehran were nearing a potential agreement to end the conflict that has shaken global energy markets.

Iranian media reported that a draft agreement between the two sides included provisions to lift oil sanctions, although the proposal still requires approval from Iranian authorities.

U.S. President Donald Trump previously said a peace agreement with Iran could be signed by the end of the week, after earlier cancelling planned strikes against the country.

Investors have responded by pricing in the possibility of improved energy flows and reduced geopolitical risks, although uncertainty remains over whether a final agreement will be reached.

Meanwhile, Goldman Sachs cut its forecast for average Brent crude prices in 2027 to $80 per barrel, citing stronger global supply growth and weaker demand, according to Reuters.

The bank pointed to rising production from the United States, Brazil, Guyana, Venezuela and the UAE, along with structural changes in global consumption, particularly in China.

Goldman expects Chinese oil demand to continue declining by slightly more than 10% as the transition toward alternatives, including electric vehicles, accelerates.

The bank forecasts Brent to average around $90 per barrel in the fourth quarter of 2026, saying lower-than-expected supply shortages have offset the impact of longer disruptions to flows through the Strait of Hormuz.

Despite the bearish outlook, Goldman warned that oil prices could rise sharply under a more severe geopolitical scenario.

If supply disruptions continue, Brent could exceed $110 per barrel late this year, while a prolonged disruption through the Strait of Hormuz could push prices toward $140 per barrel in 2027, according to the bank’s analysis.

Despite increased optimism, risks surrounding shipping through the Strait of Hormuz remain.

Reports indicated continued tensions in the region, including incidents involving drones near commercial vessels, while Iran has previously announced restrictions on maritime traffic through the strategic waterway.

Brent futures for August delivery fell 3.5% to $87.25 per barrel, while West Texas Intermediate crude for July declined 3.6% to $84.58 per barrel. European gas futures also dropped to €46.48 per megawatt-hour.