Goldman Sachs expects the average price of a barrel of oil to reach $76 in 2025 and states the reasons.

On Wednesday, the famous American investment bank Goldman Sachs published a memo that included the bank's analysts' forecasts for oil prices over the next year, as well as outlining the main factors they believe could influence crude prices.

Goldman Sachs analysts expect the average trading price for a barrel of oil to be around $76 in 2025, maintaining their price forecast for Brent crude in the range of $70 to $85 per barrel throughout 2025.

The memo also indicated that Goldman Sachs economists see significant risks influencing oil prices on both sides; negative and positive, as they expect an uncertain surplus in supply during 2025, with risk skewed towards the downside due to high spare capacity and potential trade tariffs.

However, the American lender noted that the estimation or pricing of the spread for tight physical Brent production may be lower than reality in the short term.

At the same time, Goldman Sachs experts discussed some geopolitical factors that may affect oil prices, which are:

• Limited risk premium despite ongoing tensions between Israel and Iran.
• High spare capacity of OPEC+ may provide a buffer.
• Possibilities of Iranian oil production not continuing and potential disruptions.
• Conflicts in the Middle East keep supply risks prevalent.

The memo concluded that while Goldman Sachs believes the downside risks remain dominant, they see the surplus in supply in 2025 as uncertain, and that the end of the year may witness some upward pressure on prices.