Goldman Sachs Flags Oil Surpluses Through 2026 Amid Demand Woes and Rising Supply

Oil Prices Under Pressure as Goldman Sachs Warns of Surpluses Through 2026

The global oil market is staring at significant surpluses through 2026, warns Goldman Sachs, as slowing demand and an easing of OPEC+ production cuts add pressure on crude prices. In a recent report, Goldman analysts, including Daan Struyven, forecast a surplus of 800,000 barrels per day (bpd) in 2025, widening to 1.4 million bpd in 2026.

The supply overhang is expected to weigh further on oil prices, already under strain from a sluggish economic outlook. Crude prices have slumped to four-year lows this month, largely due to the ongoing trade tensions between the US and China, which have sparked recession fears and curbed global energy demand.

The situation worsened after OPEC+ surprised markets by accelerating the return of previously curtailed output. "While the market has priced in some inventory builds, the scale of the expected surpluses in 2025 and 2026 could drive further downside in oil prices," the Goldman report noted. The bank sees Brent crude averaging $63 a barrel for the remainder of 2025, assuming no US recession and only a moderate rise in OPEC+ supply.

The analysts also revised their demand outlook sharply downward. Global oil demand is projected to grow by just 300,000 bpd in 2025 — a stark deceleration led by weakening consumption in the petrochemical sector. This comes as the U.S. Energy Information Administration (EIA) slashed its global demand growth forecast to 900,000 bpd — 400,000 bpd lower than last month’s estimate.

Brent crude was trading at around $64.87 a barrel on Monday, reflecting a 13% decline since the start of the year. Market sentiment remains bearish as the OPEC+ production shift and global economic uncertainties persist.

The oil market will be watching closely as OPEC is set to release its latest monthly report, followed by the International Energy Agency's update, both expected to provide further insight into global supply-demand dynamics.