Goldman Sachs has slashed its 2027 oil price estimate, pointing to a double-edged threat of rising supply and waning demand. The investment bank now expects Brent crude to average $80 per barrel, down from its previous forecast, according to a note cited by Reuters.
Weaker consumption lies at the heart of the revision. China, the world's largest crude importer, is using less fuel than anticipated. Gasoline sales at Sinopec — the country's biggest refiner and fuel retailer — fell 8% year over year in April, Reuters reported, while diesel demand also declined. The shift stems from a rapid EV rollout and slower economic growth.
On the supply side, Goldman assumes a sustained ramp-up in output from major non-OPEC producers will add to downward price pressure. The bank's analysts wrote that they expect "just over 10% of the demand weakness persists" as Beijing's pivot toward alternatives like electric vehicles accelerates. This structural change challenges the traditional demand-growth narrative.
OPEC+ now faces a delicate balancing act. If the alliance moves to restore halted production later this year, it could flood an already softening market. Yet holding back output risks ceding further market share to U.S., Brazilian, and Guyana crude. The cartel's next policy meeting carries heightened stakes given these demand-side headwinds.
Some analysts counter that China's demand dip may prove cyclical rather than permanent. Economic stimulus measures, they argue, could revive industrial fuel use and push oil consumption higher. Additionally, a sharp supply disruption — a hurricane in the Gulf of Mexico or a Middle East conflict — could quickly tighten the market and reverse the price trajectory.