Goldman Sachs Warns of Major Drop in Global Oil Demand, Potential Price Forecast Risks

• Global oil demand dropped by 4% to 5% (4-5 million barrels per day) in April, driven by soft retail fuel sales in China and Western Europe
• Goldman's Q4 2026 forecasts of $90/barrel Brent and $83/barrel WTI face two-sided risks: downside from demand weakness and upside if the Strait of Hormuz remains closed
• Current prices as of Friday: Brent crude settled at $93.09/barrel (down 2.04%) and WTI at $90.54/barrel (down 2.69%)

Summary: Goldman Sachs Warns of Major Drop in Global Oil Demand

Key Development:

Goldman Sachs reported a significant decline in global oil demand, creating uncertainty around its Q4 2026 price forecasts of $90/barrel for Brent crude and $83/barrel for WTI.

Critical Figures:

• Estimated demand destruction: 4-5 million barrels per day (mb/d) in April
• Demand decline represents 4-5% reduction in global consumption
• Current prices (June 5): Brent at $93.09/barrel (down 2.04%), WTI at $90.54/barrel (down 2.69%)

Primary Catalyst:

The closure of the Strait of Hormuz to oil tankers triggered the demand shock, disrupting global oil flows through one of the world's most critical energy chokepoints.

Geographic Impact:

Weaker consumption concentrated in China and Western Europe, with April retail fuel sales reports showing soft demand in both regions.

Methodology:

Goldman based its estimates on three analytical approaches: global refinery runs analysis, high-frequency oil demand measures, and forecasts from other trading houses and analysts.

Market Implications:

The bank highlighted two-sided price risks:

• Downside risk: Sustained demand weakness could push prices below forecasts
• Upside risk: Prolonged strait closure and further supply disruptions could drive prices higher

Sector Context:

This assessment adds volatility to oil market outlooks, affecting energy sector investments, refining operations, and commodity trading strategies. The significant demand destruction suggests economic headwinds in major consuming regions, while supply constraints from the strait closure create a complex risk environment for crude pricing through 2026.