Goldman Sachs slashes crude oil price target by 5.5% amid tariff woes after Brent, WTI hit four-year low on OPEC+ supply

Goldman Sachs lowered its forecast for Brent crude oil's average price this year by 5.5 per cent to $69 per barrel and for US West Texas Intermediate (WTI) prices by 4.3 per cent to $66 per barrel, citing the risks of higher supply by the Organisation of Petroleum Exporting Countries and its allies (OPEC+) and the global tariff-led trade war, likely triggering a recession.

The Wall Street brokerage cut its 2026 average price forecast for Brent by nine per cent to $62 and WTI by 6.3 per cent to $59. It warned that the new estimates could be lowered. "The risks to our reduced oil price forecast are to the downside, especially for 2026, given growing risks of recession and to a lesser extent of higher OPEC+ supply," said Goldman analysts.

Also Read: Oil prices crash over 8% to near 4-year lows amid trade war, Opec supply woes; Brent crude slips below $65 mark

Crude oil outlook: Goldman Sachs lowest 2025 forecast

Brent crude was priced at $69.59 a barrel on Friday, while WTI was at $66.39. Crude prices posted their biggest percentage drops since 2022 on Thursday after US President Donald Trump slapped reciprocal tariffs on many countries and eight OPEC+ members unexpectedly advanced their plan to phase out production cuts by boosting output in May.

The latter, said Goldman, showed OPEC's flexibility to rapidly implement large output hikes, diminishing the likelihood of a short-term price boost from lower supply. The brokerage said it now expects oil demand to grow by only 600,000 barrels per day (bpd) this year, down from its previous forecast of 900,000 bpd, and to increase by 700,000 bpd in 2026.

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Crude oil prices today

Crude oil prices crashed seven per cent on Friday to settle at their lowest in over three years as China ramped up tariffs on US goods, escalating a trade war that has led investors to price in a higher probability of recession.

China, the world's top oil importer, announced it will impose additional tariffs of 34 per cent on all US goods from April 10. Nations have readied retaliation after Trump raised tariff to their highest in more than a century.

Commodities, including natural gas, soybeans and gold, also dived while global stock markets tumbled. Investment bank JPMorgan said it now sees a 60 per cent chance of a global economic recession by year-end, up from 40 per cent.

Global benchmark Brent futures settled $4.56, or 6.5 per cent, lower at $65.58 a barrel, while US WTI crude futures lost $4.96, or 7.4 per cent, to end at $61.99. At the session low, Brent fell to $64.03, and WTI hit $60.45, its lowest in four years. For the week, Brent crude was down 10.9 per cent, its biggest weekly loss in percentage terms in a year and a half, while WTI posted its biggest decline in two years with a drop of 10.6 per cent.

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"Donald Trump has also threatened to impose secondary tariffs on Russian oil, and he toughened sanctions on Iran as part of his administration's "maximum pressure" campaign to cut its exports," said Prathamesh Mallya, DVP- Research, Non-Agri Commodities and Currencies, Angel One Ltd

Adding to the complex global supply picture, Russia, the world's second-largest oil exporter, imposed restrictions on another major oil export route, suspending a mooring at the Black Sea port of Novorossiisk a day after restricting loadings from a key Caspian pipeline.

"Russia produces about nine million barrels of oil a day, or just under a tenth of global production. Its ports also ship oil from neighbouring Kazakhstan. Crude prices will likely trade lower after Trump announced reciprocal tariffs on trading partners, stoking concerns that a global trade war may dampen demand for crude," added Mallya.

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OPEC+ supply hike

Further pressuring oil prices, the OPEC+ advanced plans for output increases. The group aims to return 411,000 barrels per day (bpd) to the market in May, up from the planned 135,000 bpd. HSBC also trimmed its 2025 global oil demand forecast from one million bpd to 0.9 million bpd, citing tariffs and OPEC+ supply.

A Russian court's ruling that the Caspian Pipeline Consortium's (CPC) Black Sea export terminal facilities should not be suspended also pressured prices lower. That decision could avert a fall in Kazakhstan's oil production and supplies.

Imports of oil, gas and refined products were exempted from Trump's sweeping new tariffs. Still, the policies could stoke inflation, slow economic growth, and intensify trade disputes, weighing on crude oil prices.

"A sharp tariff hike on China spooked energy markets, leading to oil’s biggest single-day fall in three years. Rising OPEC+ output and weaker demand due to trade tariffs may keep prices under pressure. We expect prices to remain volatile. Oil has support at $65.50-64.80, and resistance is at $66.90-67.60. In INR, it has support at ₹5,655-5,590 while resistance at ₹5,790-5,850," said Rahul Kalantri, VP of Commodities, Mehta Equities Ltd.

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