$40 per barrel is not the bottom: Goldman Sachs makes a radical forecast for lower oil prices
14 April 08:17
Investment company Goldman Sachs expects the decline in oil prices to continue until the end of 2026 due to the growing risk of recession and increased supply from the OPEC group. This was reported by Komersant ukrainskyi with reference to Reuters.
As of Monday, at 03:55 Kyiv time, Brent crude oil futures fell to about $64.72 per barrel, while WTI futures were at $61.44.
Soft scenario
According to the bank’s forecasts, Brent and WTI oil prices will gradually decline, averaging $63 and $59 per barrel, respectively, by the end of 2025, and $58 and $55 in 2026.
Given the weak growth prospects amid the global trade war, the bank’s analysts predict that oil demand will grow by only 300,000 barrels per day between the end of last year and the end of 2025.
The bank also lowered its forecasts for global demand growth for the fourth quarter of 2026 by 900,000 barrels per day compared to mid-March due to the escalation of the US-China trade war.
Goldman Sachs also lowered its forecast for US shale oil supplies for the fourth quarter of 2026 by 500,000 barrels per day.
Wall Street analysts predict that, despite the fact that the market is already taking into account some future reserves, significant oil gluts – 800,000 barrels per day in 2025 and 1.4 million barrels per day in 2026 – will continue to put downward pressure on oil prices.
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Radical scenario
In the scenario of a global economic downturn or a complete cancellation of OPEC’s voluntary 2.2 million barrels per day production cuts, Brent oil prices could fall to the $40 per barrel range in 2026.
In the most radical scenario, which combines both factors, prices could potentially fall below $40, the bank notes.
Russia is already hurting
It is known that Russia is critically dependent on the export of its energy resources. First and foremost, on oil exports. In 2024, Russia’s federal budget revenues from oil sales amounted to 9.19 trillion rubles (approximately $89.4 billion). Total budget revenues for this period amounted to 36.71 trillion rubles. Thus, the share of oil revenues in the total structure of Russian budget revenues in 2024 was approximately 25%
This indicates that, despite international sanctions and attempts to diversify revenue sources, oil remains a key source of financing for the Russian budget.
Russian Urals oil is traditionally sold at a lower price than Brent and WTI, and it is also subject to additional factors that raw materials from other countries do not experience, namely Western sanctions. However, during all three years of the full-scale war with Ukraine, Russia has been successfully selling its oil – its main buyers today are China and India.
The federal budget of the Russian Federation for 2025 included an oil price of $70. Meanwhile, due to the collapse in the global oil market caused by Donald Trump ‘s trade war and OPEC’s decision to further increase production, the price of Russian Urals oil, according to the Ministry of Finance, was $58 per barrel on April 11.
So far, market analysts’ forecasts do not promise Russia any serious problems related to the price of oil, as it still has a very large backlash for sales. According to economic expert Oleg Pendzin, even a price of $50 per barrel is still acceptable for Russia.
“Currently, the direct cost of Russian oil production is about $37-38 per barrel. This is the direct cost. The critical figure for Russia is the sales price of $45,”
– explained the economist exclusively for .
Therefore, the most likely way to hurt Russia over oil is still to tighten sanctions, including secondary sanctions against its buyers. The point of this step is to make it physically impossible for Russia to sell large volumes of oil and thus receive funds to continue its aggressive war of aggression.
However, back during his election campaign, after making statements about ending the war in 24 hours or 100 days, Donald Trump made a very realistic statement. He said that in order for Russia to lose the ability to fight, it would be enough to simply collapse oil prices. And he seems to be going to do that if Russia does not make concessions. Whether Trump realizes it or not, this is exactly what is happening now.
The Russian economy is already slowing down significantly at a price of $58 per barrel of oil, the industry is stagnating, and recession looks like a very real prospect.
And if the current downward trend in prices continues, the $45 per barrel figure no longer looks fantastic.
If events develop according to Goldman Sachs’ radical scenario, Russia will have to sell its oil below cost. This should completely destroy the Russian economy.
