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Macquarie Group just took a cleaver to its oil price outlook, cutting Brent crude forecasts for both 2026 and 2027 as the bank expects a wave of new supply from the Middle East to flood the market. The revision drops its 2026 Brent target to $80 per barrel, down from $90, and brings its 2027 average to $75 per barrel from a previous estimate of $80.
Wall Street’s oil bears are multiplying
Macquarie is far from alone in its pessimism. Goldman Sachs has landed on nearly identical numbers, revising its Q4 2026 Brent forecast to $80 per barrel and its 2027 average to $75 per barrel.
Then there is Citi, which is even more aggressive on the downside. The bank now projects Brent crude will average just $65 per barrel in 2027, down from its previous forecast of $80. That is a 19% cut, and it puts Citi $10 below where Macquarie and Goldman see the market heading.
The potential reopening of the Strait of Hormuz, one of the world’s most critical shipping chokepoints, is central to these revised outlooks. Roughly a fifth of global oil supply passes through that narrow waterway. A potential US-Iran agreement is the geopolitical variable these banks are pricing in, with the prospect of Iranian crude re-entering global markets at scale adding barrels to an already well-supplied market.
Macquarie’s track record on oil revisions
This is not Macquarie’s first time marking down its oil outlook recently. Back in October 2025, the bank adjusted its WTI (West Texas Intermediate) price forecasts to $64 per barrel for 2025 and $57 per barrel for 2026, citing oversupply concerns at the time.
To put the numbers in perspective, Brent crude traded above $90 per barrel as recently as late 2023 and early 2024. Saudi Arabia, for example, has historically needed oil prices well above $80 per barrel to balance its government spending. A sustained slide toward $75 or lower would force difficult choices about production cuts versus market share.
What this means for investors
Lower oil prices tend to compress margins for upstream producers, the companies that drill and extract. Integrated majors with downstream refining and chemicals operations can partially offset this, but pure-play exploration and production companies face the most direct hit to earnings when crude prices fall.
The divergence between Citi’s $65 target and the $75 consensus from Macquarie and Goldman is itself informative. A $10 per barrel spread between major bank forecasts for the same year tells you the range of outcomes is wide, with geopolitical variables around US-Iran relations and OPEC+ discipline introducing genuine uncertainty.
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