NextFin News - Global oil inventories are depleting at a pace never before recorded in the history of the energy market, prompting Goldman Sachs to sharply upgrade its crude price forecasts as the industry grapples with a massive supply deficit in the Persian Gulf. The bank’s commodities research team, led by Daan Struyven, reported that global visible oil inventories are currently drawing down by an estimated 11 million to 12 million barrels per day in April, a "historic" swing that has effectively erased the market surplus expected earlier this year.
Brent crude is currently trading at $101 per barrel, reflecting the immediate physical tightness in the market. Goldman Sachs has responded to this "extreme" inventory draw by raising its fourth-quarter 2026 Brent forecast to $90 per barrel, up from previous estimates, while lifting its West Texas Intermediate (WTI) target to $83 per barrel. The revision is primarily driven by the loss of approximately 14.5 million barrels per day of Middle East production, a disruption that has outpaced even the most aggressive emergency stockpile releases from the International Energy Agency (IEA).
Struyven, who serves as Goldman’s head of oil research, has historically maintained a data-driven, often bullish stance on structural supply constraints, though he has not been immune to the market’s volatility. His team’s latest assessment characterizes the current environment as a "two-way risk" scenario, yet the sheer velocity of the April inventory draws has forced a pivot toward a more hawkish outlook for the end of the year. This perspective, while influential, remains a specific institutional judgment and does not yet represent a broader Wall Street consensus, as other firms like ANZ have noted that while the market is tightening, the duration of the Middle East disruption remains the primary variable.
The supply-side shock is centered on the Strait of Hormuz, where flows remain at a mere 10% of normal levels, or roughly 2.1 million barrels per day. While U.S. President Trump has overseen efforts to coordinate with IEA member states for a record release of 400 million barrels from strategic reserves, Goldman’s analysis suggests logistical limits will prevent these releases from fully offsetting the Persian Gulf shortfall. The bank estimates a physical ceiling of 3 million barrels per day on draws from OECD strategic petroleum reserves, leaving a significant gap that must be filled by demand destruction or higher prices.
Skeptics of the $90 Brent forecast point to early signs of cooling demand in specific sectors. Goldman’s own data indicates that naphtha demand in April is likely to decrease by 1.3 million barrels per day compared to February, while jet fuel demand is trailing its seasonal trend by 500,000 barrels per day. These figures suggest that the "extreme" draws may eventually be tempered by a global economic slowdown or a recovery in shipping through the Strait of Hormuz, which could rapidly reintroduce millions of barrels to the market and invalidate the current bullish trajectory.
The sustainability of the current price rally depends heavily on whether the 8 million barrels per day of crude production currently shut in across the Persian Gulf remains offline through the summer. If diplomatic efforts or a de-escalation in regional tensions lead to a recovery in flows, the "historic" deficit could transition back to a surplus as quickly as it arrived. For now, the physical market is signaling a level of scarcity that has not been seen in decades, leaving traders to weigh Goldman’s aggressive price targets against the looming threat of a demand-side correction.
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