Goldman Sachs Flags 2027 Oil Supply Surplus as OPEC+ Output Set for 5.8 Million Bpd Climb and Brent Slides to $71

Goldman Sachs has warned that oil markets face a significant supply surplus in 2027 as OPEC+ output accelerates far beyond projected demand growth. Brent crude traded at $71.33 per barrel on Wednesday morning on the ICE exchange, down 0.34% on the session, per OilPrice.com. WTI eased to $68.28 per barrel on the CME, off 0.44% through mid-morning July 2. Goldman analysts, as reported by OilPrice.com, said inventory rebuilding since the Hormuz Strait reopening will not prevent a significant supply glut. Saudi Arabia sent approximately 10 million barrels through the reopened strait as supertanker operations resumed in recent days.

OPEC+ Output and Demand: A 3.3 Million Bpd Gap in 2027

The Energy Information Administration's June 2026 Short-Term Energy Outlook projects OPEC+ production climbing from 34.0 million barrels per day in 2026 to 39.8 million barrels per day in 2027. That is an increase of 5.8 million barrels per day in a single year, the supply-side figure at the heart of Goldman's concern. Global oil demand, per the same EIA model, is expected to grow by 2.5 million barrels per day in 2027, following a demand decline of 1.1 million barrels per day in 2026. Setting OPEC+ supply growth against demand growth produces a net surplus of at least 3.3 million barrels per day on an annualized basis. Non-OPEC supply growth, including US production rising to 14.2 million barrels per day in 2027 per the EIA, adds further pressure on the supply side.

EIA Brent Forecast Already Points to a Declining Price Trajectory

The EIA's June 9 Short-Term Energy Outlook projected Brent crude averaging $95 per barrel across 2026, falling to $79 per barrel in 2027. Both figures reflected a supply model that assumed Hormuz disruptions would persist longer than they ultimately did. Brent has already slipped to $71.33, well below the 2026 annual average the EIA expected when it published the June outlook. If Brent holds near current levels through H2 2026, the full-year average could settle $10 to $15 below the EIA's June projection. The EIA's own $79 Brent target for 2027 aligns directly with Goldman's surplus concern, even before accounting for the accelerated Hormuz recovery.

Weekly Inventory Data Shows Draws Continuing but Trend Could Reverse

EIA's weekly petroleum status report for the week ending June 26, 2026, released July 1, recorded a crude inventory draw of 9.311 million barrels. Total US crude stocks stood at 734.014 million barrels. US domestic production held at 13.81 million barrels per day, 377,000 barrels per day above the same week in 2025. Gasoline stocks drew by 2.333 million barrels, while distillate inventories built by 2.483 million barrels. Goldman's concern is not the current weekly draw but what happens to inventory trends when the 5.8 million barrels-per-day OPEC+ expansion reaches full speed in 2027.

Canadian Crude Feeling the Global Price Pressure

Western Canadian Select traded at $56.23 per barrel as of Wednesday morning, per OilPrice.com, a decline of 1.61%, steeper than WTI's 0.44% drop. The WCS-WTI differential stood at $12.05 per barrel, reflecting the persistent heavy crude discount for Alberta oil sands producers. Alberta operators including Suncor Energy and Imperial Oil, the ExxonMobil subsidiary, realize prices closely tied to WCS benchmarks. A sustained 2027 supply glut and lower WTI would further compress oil sands netbacks, particularly for higher-cost steam-assisted gravity drainage operations. Oil Authority noted earlier this week that WTI was already testing $68 as Hormuz tankers carrying pre-disruption Iranian inventory cleared the strait.