Goldman Sachs has kept its Brent crude price forecasts, projecting an average of $64 per barrel in Q4 2025 and $56 in 2026. They cautioned about mounting risks to oil demand, due to increasing U.S. tariffs, potential new trade measures, and weaker U.S. economic data.
Goldman noted the signs of below-trend U.S. economic growth may increase the chance of a recession within the next year. This could impact their projection for global oil demand to grow by 800,000 barrels per day annually in 2025 and 2026.
Geopolitical Pressures on Oil Supply
On the supply side, geopolitical pressure on sanctioned oil from Russia and Iran might keep prices elevated, as global spare production capacity normalizes quicker than expected. Despite this, Goldman sees limited risk of major supply disruptions from Russia, with continued demand from China and India, though Indian refiners have halted some purchases due to narrowing discounts and U.S. pressure.
OPEC+ agreed to boost output by 547,000 barrels per day in September to regain lost market share. Goldman anticipates the group will maintain steady production beyond September, as stockpiles in OECD countries increase and seasonal demand decreases.
Given the forecast for Brent crude to average $64 in the fourth quarter, we see a market with a clear bearish tilt driven by weakening economic indicators. The rising probability of a U.S. recession presents a significant headwind for oil demand. The latest report from the Bureau of Economic Analysis showed U.S. GDP growth slowing to just 0.9% in Q2 2025, reinforcing concerns that demand growth will fall short of the expected 800,000 barrels per day.
Strategic Moves for Traders
For traders, this suggests that strategies protecting against downside price movement are prudent in the coming weeks. Recent Energy Information Administration data from late July 2025 showed a surprise build in U.S. crude inventories, pushing stockpiles above the five-year average for this time of year. This inventory pressure, combined with the planned OPEC+ output increase of 547,000 barrels per day in September, creates a strong case for weakening prompt-month prices.
Considering these factors, selling call options or establishing bear call spreads on Brent futures for late Q4 2025 delivery appears attractive. Setting these positions with strike prices around the $65-$70 per barrel level allows traders to profit from price stagnation or a modest decline. This capitalizes on the view that a significant price rally is unlikely given the demand outlook.
However, geopolitical risks surrounding sanctioned Russian and Iranian oil should not be ignored, as they provide a floor for prices. The CBOE Crude Oil Volatility Index (OVX) has been trading near 35, which seems to underprice the risk of either a sharp economic downturn or a sudden supply disruption. Buying long-dated put options could therefore be a cost-effective hedge against a more severe price drop triggered by a recession.
We can look back to the 2008 financial crisis, when oil prices collapsed from over $140 to below $40 in months as demand vanished almost overnight. While the current slowdown is not as severe, it serves as a powerful reminder of how quickly demand destruction can overwhelm supply-side narratives. This historical precedent supports positioning for lower prices, even with ongoing supply risks.
