Goldman Sachs Oil Price Forecast: GS Stock Rallies +3% on $120 Target

Will Goldman Sachs Oil Price Forecast Hit $120?

Analysts at Goldman Sachs have outlined two distinct paths for global energy markets heading into the final quarters of 2026 and beyond. In their newly released research note, the bank’s commodity team highlighted the Strait of Hormuz as the primary catalyst for market volatility. If disruptions in this vital waterway persist due to ongoing hostilities between the U.S. and Iran, Brent crude could surge past $120 per barrel by the fourth quarter of 2026.

This bullish scenario is a direct response to a 45% drop in oil flows through the strait compared to pre-conflict levels, a key metric influencing the **Goldman Sachs Oil Price** model. If the disturbance continues throughout 2027, Goldman Sachs warns that Brent could average $100 a barrel next year, assuming Persian Gulf production does not fully recover until additional bypass pipeline capacity comes online near the end of 2027. Brent crude has already climbed past $90 a barrel, representing a 30% increase from its recent lows in the $70s. However, the base-case scenario for the **Goldman Sachs Oil Price** forecast remains more conservative. If diplomatic efforts succeed and a proposed 10-day ceasefire leads to de-escalation, the bank expects Brent to average $80 a barrel in Q4 2026 and ease to $75 next year.

How Will Chevron and Exxon Mobil Benefit?

Whether the bullish or conservative scenario plays out, major energy corporations are positioned to thrive. Under the $120 upside scenario, producers like Chevron (CVX) and Exxon Mobil (XOM) would generate historic levels of excess free cash flow. This windfall would likely be funneled directly back to shareholders through aggressive stock buybacks and dividend increases.

Even if the market aligns with the base-case **Goldman Sachs Oil Price** of $80, energy giants remain highly profitable. Chevron, for instance, is projected to grow its free cash flow at an annual rate of over 10% through 2030, even if oil prices hover around $70. This strong financial footing allows these companies to maintain robust balance sheets even during periods of broader economic uncertainty. Investors seeking shelter from inflation and geopolitical risk often turn to these cash-rich energy giants. The ability of these firms to remain highly profitable at $75 oil ensures that the downside risk remains limited, while the upside potential under a $120 scenario provides an attractive growth option.