Goldman Sachs has raised its oil price forecast for 2026 to $85 per barrel, significantly above Nigeria’s budget benchmark of $64.85.
The new projection was disclosed by Goldman Sachs commodity analysts in a note released on Sunday, amid escalating tensions in the Middle East and disruptions to global oil supply.
The latest outlook marks a notable increase from the bank’s earlier forecast, which had projected Brent crude to average $77 per barrel and West Texas Intermediate (WTI) to average $72 per barrel.
Checks by Nairametrics at the time of filing this report showed that Brent crude — the international benchmark — was trading at $100 per barrel, while WTI stood at $88.
What they are saying
Goldman Sachs analysts say the ongoing crisis in the Middle East could trigger an unprecedented disruption in global oil supply, driven largely by restrictions in the Strait of Hormuz — a critical chokepoint for global energy flows.
- The bank noted that supply losses from the crisis could peak at as much as 17 million barrels per day, with tanker traffic disruptions expected to last for weeks before gradual recovery.
According to the analysts, the scale of the disruption could reshape how markets and policymakers assess long-term energy risks, particularly given the concentration of supply in the Middle East.
- “The largest oil supply shock ever will likely lead policymakers and markets to recognize the structural risks from the high concentration of production and spare capacity in the Middle East and from the vulnerability of energy infrastructure,” the Goldman commodity team wrote in its note.
More insights
Although the ongoing conflict in the Middle East has forced the investment banking giant to review its oil forecast upward, this is not the first adjustment this year.
- In late February, Nairametrics reported that Goldman Sachs had already revised its oil outlook, projecting Brent crude to average $60 per barrel in the fourth quarter of 2026, reflecting tightening inventories and shifting global market dynamics.
- At the time, the bank raised its fourth-quarter 2026 oil price estimates by $6, while also adjusting its full-year projections upward.
Brent crude was then projected to average $64 per barrel in 2026, up from an earlier estimate of $56, while WTI was forecast at $60 per barrel compared to a previous $52.
For the fourth quarter of 2026, Brent was expected to trade at $60 per barrel and WTI at $56.
Despite these upward revisions, Goldman maintained its forecast of a 2.3 million barrels per day global oil surplus in 2026, citing offsetting downgrades of 0.2 million barrels per day each to both supply and demand.
What you should know
Goldman’s latest oil price projection has significant implications for Nigeria’s fiscal outlook, particularly as the country’s 2026 budget is built around more conservative assumptions.
- The Federal Executive Council approved a benchmark oil price of $64 per barrel for the 2026 budget, alongside a production target of 2.6 million barrels per day.
- However, a more cautious production estimate of 1.8 million barrels per day will be used for actual budget calculations, reflecting ongoing challenges in meeting output targets.
- With Goldman’s projection of $85 per barrel, Nigeria could benefit from higher-than-expected oil revenues if prices remain elevated — providing potential fiscal relief and improving foreign exchange inflows.
This aligns with a recent report by BMI, which noted that Nigeria stands to gain from sustained increases in global oil prices driven by the ongoing conflict involving the United States, Iran, and Israel.
