Goldman Sachs has warned that oil prices could plunge below $40 per barrel by late 2026 if a U.S.-led trade war triggers a global economic downturn and major producers ramp up supply.
In a newly released research note, Goldman outlines a worst-case scenario in which a U.S. recession sparks a broader global GDP slowdown, and OPEC+ fully unwinds its current production cuts. Under those conditions, Brent crude could slip just below $40 per barrel—a level not seen since November 2020, just before positive vaccine news fueled a market rally.
However, Goldman maintains that sustained oil prices well below $40 are unlikely, citing two key reasons:
“First, U.S. shale production increasingly provides a firmer floor at lower prices. Second, a potential U.S. recession in 2025 is unlikely to be severe, given the absence of major financial imbalances in the private sector.”
As of today, Brent crude is trading at around $64 per barrel, up 0.5%.
Goldman’s baseline forecast assumes a more optimistic outlook, with tariff reductions, no U.S. recession, and only moderate OPEC+ supply increases. Under that scenario, the bank expects oil to fall to $62 per barrel by the end of this year, and to $55 by the end of 2026.
The sub-$40 projection remains a “more extreme and less likely scenario”, the bank notes.
Declining Oil Prices Pose Threat to Russian Economy, Says Central Bank Governor
A 14% drop in oil prices over the past week, driven by fears surrounding Donald Trump’s escalating trade war, is raising alarm in Moscow.
According to Reuters, Elvira Nabiullina, Governor of Russia’s Central Bank, warned that the sharp decline in global oil prices—triggered by U.S. tariff measures—could pose a risk to the Russian economy.
Speaking to the TASS news agency on Tuesday, Nabiullina said the central bank is currently assessing the potential impact, but noted that Russia’s fiscal policy includes a technical budget rule designed to help cushion the blow to public finances in times of oil market volatility.
