As bearish sentiment builds in oil markets, major banks are slashing their price forecasts for both Brent and WTI, citing mounting recession risks, the U.S. tariff shockwave, and a surprise uptick in OPEC+ supply.

Goldman Sachs led the downgrades, issuing its second cut in days. The bank now sees Brent averaging $58 and WTI at $55 in 2026, down $4 per barrel from its prior estimate, and well below earlier projections of $62 and $59, respectively. It follows a 5.5% cut to its 2025 Brent forecast on Friday and a sharply reduced view on demand, now pegged at just 300,000 bpd growth for 2024—half its earlier outlook.

Goldman also hiked its U.S. recession odds to 45%, warning of a “sharp tightening in financial conditions” and policy uncertainty that is likely to curb capital spending. The firm hinted that a reversal of tariffs could lift prices above current forecasts, but for now, it’s preparing for prolonged weakness.

Citi dropped its near-term Brent forecast to $60 per barrel for the next three months, pointing to a $10 drop in prices since the tariff announcement. The bank is cautious on any short-term rally, advising investors to sell into strength unless a major shift in U.S. policy—or a dramatic supply response—materializes.

Morgan Stanley followed suit, cutting its Brent outlook for Q2 to $65 per barrel, down from $70. It now expects Brent to hover around $62.50 through the second half of the year.

This wave of forecast downgrades builds on market instability that had already taken hold before today. ING commodity analysts previously flagged the OPEC+ decision to increase output as a key factor driving recent oil price moves. According to ING, the shift was motivated by three pressures: U.S. sanctions on Venezuela and Iran, Washington’s push for lower prices, and a desire within OPEC+ to discipline overproducers like Iraq and Kazakhstan.