Morgan Stanley and Goldman Sachs have slashed their oil price forecasts after a diplomatic breakthrough between the United States and Iran earlier this week. The move signals a swift reassessment of geopolitical risk premiums that had propped up crude values.
Morgan Stanley now expects Brent crude to average $80 per barrel in the fourth quarter of 2026, down from a prior estimate of $100 for the third quarter. Its third-quarter 2026 view sits at $90, according to a note cited by Bloomberg. Goldman Sachs made parallel reductions, though specific figures were not detailed in available reports.
The revision reflects expectations that a potential U.S.-Iran deal could bring Iranian oil exports back into formal markets, adding supply. Iran has been subject to tight sanctions, and its return could ease current supply constraints.
Infrastructure and investment dynamics remain unsettled. Lower long-term price forecasts could slow capex into new drilling projects, particularly in U.S. shale and deepwater basins, where breakeven costs often hover near current price ranges.
Geopolitically, the development marks a sharp pivot from years of maximum-pressure sanctions. Should talks collapse, however, prices could rebound quickly. The forecast cuts hinge entirely on sustained diplomatic progress — a fragile assumption in a region with a history of stalled negotiations.