Goldman Sachs’ Crystal Ball: Oil Prices on the Rise to $107 Amidst OPEC+ Supply Cuts

Samantha Miller
  • Goldman Sachs Warns of Potential Triple-Digit Oil Prices: The financial giant cautions that oil prices could surge to $107 per barrel by December 2024 due to Saudi Arabia and Russia's extended supply cuts.
  • Concerns Over Saudi Oil Supply and OPEC+ Actions: Goldman Sachs predicts a smaller Saudi oil supply than anticipated and questions its own production assumptions amid OPEC+ cut extensions, contributing to bullish oil price risks.
  • Balancing Act for OPEC+ and Global Politics: While higher oil prices benefit oil-producing nations like Saudi Arabia and Russia, they may also prompt US shale production increases and investment in clean energy. The political importance of stable US gasoline prices further complicates the situation.

In an oil market rollercoaster, Goldman Sachs has issued a striking warning, suggesting that the world may soon see a dramatic surge in oil prices, potentially reaching a staggering $107 per barrel. The ominous prediction arises from the extended supply cuts led by global oil giants, Saudi Arabia and Russia.

Goldman Sachs, known for its analytical prowess, had foreseen the possibility of soaring oil prices even before the recent announcement of the extended production cuts. This revelation sent Brent crude oil, the North Sea-produced benchmark, soaring above $91 per barrel, a level not witnessed in a decade.

Initially, the financial powerhouse had set its sights on Brent crude reaching $86 by December, and $93 by the close of 2024. However, recent developments have sparked concerns and introduced “two bullish risks” to their predictions.

Firstly, Goldman Sachs anticipates Saudi Arabia’s oil supply to be substantially smaller than previously projected, potentially shrinking by 500,000 barrels per day. This alone could tack an additional $2 onto the per-barrel price of oil.

Secondly, the bank raises eyebrows about its own assumptions concerning oil production, fearing inaccuracies if OPEC+ continues with these prolonged cuts. Originally, the bank had assumed that, come January, participating countries would restore half of the 1.7 million barrel per day cut initiated in April. Now, a more protracted extension is on the horizon.

Contemplating a bullish scenario where OPEC+ clings to these cuts through the end of 2024 and Saudi Arabia gradually scales up production, Goldman Sachs paints a vivid picture of Brent oil prices reaching an astonishing $107 a barrel by December 2024.

However, Goldman Sachs is quick to stress that this is not their “baseline view,” as such a strategy could have unintended consequences. While higher oil prices could fill Saudi Arabia’s coffers and fund Russia’s endeavors, they could also inadvertently stimulate US shale producers to ramp up their supply in a bid to deflate prices. Additionally, surging prices might attract more investments into the realm of clean energy.

Another compelling reason for OPEC+ to tread carefully towards $100 oil, as per Goldman Sachs, is the “political importance of US gasoline prices.” US presidents have a vested interest in keeping gasoline prices stable, especially in the lead-up to elections.

US National Security Advisor Jake Sullivan emphasized President Joe Biden’s commitment to easing the burden on consumers at the gas pump, stating, “The thing that we ultimately stand for is a stable, effective supply of energy to the global markets so that we can, in fact, deliver relief to consumers at the pump.”

As the world watches these market dynamics unfold, the energy landscape remains in a state of flux, with Goldman Sachs’ warning of a potential $107 oil price serving as a stark reminder of the intricate global interplay between geopolitics and energy markets.

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Samantha Miller is a business and finance journalist with over 10 years of experience covering the latest news and trends shaping the corporate landscape. She began her career at The Wall Street Journal, where she reported on major companies and industry developments. Now, Samantha serve as a senior business writer for, profiling influential executives and providing in-depth analysis on business and financial topics.
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