Goldman Sachs Projects Persistent 2 Million bpd Oil Surplus Through 2027 After Strait of Hormuz Normalization

Goldman Sachs commodity research, citing data on depleted inventories and the mid-June US-Iran memorandum of understanding, concludes that SPR restocking will not absorb the supply increase expected once traffic through the Strait of Hormuz returns to pre-crisis levels. The bank’s note records current Cushing and global product stocks at multi-decade lows while projecting non-OPEC supply growth and Iranian export recovery to outpace demand. This view aligns with Morgan Stanley’s concurrent downward revision of price forecasts for the next eighteen months.

The structural overhang stems from the documented shift in US policy toward negotiated sanctions relief rather than sustained maximum-pressure enforcement. Primary records show both Washington and Tehran committing to phased de-escalation that directly reduces the risk premium previously embedded in Hormuz flows. Asian SPR capacity additions, while real, operate on multi-year construction timelines and cannot offset immediate barrels entering the market.

Price pressure is therefore expected to remain multi-year rather than cyclical. Forward curves already price 2027 Brent near or below $70 per barrel in several bank models, consistent with sustained inventory builds that erode OPEC+ spare-capacity leverage. Central bank and IEA monthly data releases will provide the first verifiable test of whether the surplus materializes at the projected scale.