Crude Oil Could Crash Below $40 in Extreme Scenarios, Warns Goldman Sachs
April-8, 2025: New York:
Goldman Sachs has issued a stark warning that crude oil prices could plummet below $40 per barrel in the event of an “extreme” global downturn, marking one of the most bearish forecasts in recent memory. This comes on the heels of the investment bank slashing its Brent crude outlook twice in one week, citing growing risks from the escalating US-China trade war and increasing oil supply.
In a report dated April 7, analysts including Yulia Grigsby said that under a worst-case scenario—featuring both a global GDP slowdown and a complete reversal of OPEC+ supply cuts—Brent could dip to just below $40 a barrel by late 2026.
“This is not our base case,” the analysts clarified. Goldman Sachs’ current projection puts Brent at $55 by December 2025, and $50 by the end of 2026, assuming moderate supply and demand trends.
The global oil market has been in turmoil amid President Trump’s aggressive tariff measures, retaliatory actions from global powers like China, and mounting fears of a global recession. Demand concerns are now compounded by OPEC’s recent decision to increase output, reversing years of disciplined supply cuts.
Brent crude briefly touched a four-year low on Monday, settling around $65.05 a barrel, and continues to trade under pressure.
Other financial institutions like Morgan Stanley and Societe Generale have also reduced their oil forecasts this week. Analysts are now mapping both best- and worst-case outcomes to assess volatility in energy markets.
“Assuming a standard US recession and expected supply levels, Brent could average $58 per barrel by December this year,” Goldman’s report titled “How Low Could Oil Prices Go?” noted.
Also Read: Elon Musk Opposes Trump’s 50% Tariff Plan On China? Know More
| Scenario | Brent Price Forecast |
|---|---|
| Base Case (Dec 2025) | $55 per barrel |
| Base Case (Dec 2026) | $50 per barrel |
| Extreme Case (Late 2026) | <$40 per barrel |
crude oil price, Goldman Sachs oil forecast, Brent crude prediction, oil market crash, OPEC supply cuts, US-China trade war, Trump tariffs, global recession risk, energy market outlook, oil price prediction 2025
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