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Goldman Sachs Predicts Oil Prices to Hit $90 by Q3 2025 Amid OPEC+ Cuts – March 16, 2025
On March 16, 2025, Goldman Sachs sent shockwaves through the energy markets with a bold forecast: oil prices could climb to $90 per barrel by the third quarter, driven by OPEC+ production cuts and geopolitical tensions. The prediction, detailed in a report covered by Reuters and Bloomberg, comes as Brent crude hovered at $73 on March 12, sparking debate about the global energy outlook. Between March 12 and March 18, this news reshaped investor strategies and underscored oil’s volatile role in 2025’s financial landscape. Here’s the full story, packed with insights and implications.
The Forecast: $90 Oil by Q3
Goldman’s analysts, led by commodity guru Jeff Currie, laid out a compelling case:
- OPEC+ Discipline: The cartel’s decision on March 14 to extend 2.2 million barrels per day (bpd) cuts through June 2025 tightens supply.
- Demand Rebound: China’s industrial recovery and U.S. summer driving season could push global demand up by 1.5 million bpd.
- Geopolitical Wildcards: Escalating tensions in the Middle East, notably a March 15 flare-up near Yemen, threaten shipping lanes.
The bank sees Brent crude averaging $85 in Q2, spiking to $90 by July-September. WTI, the U.S. benchmark, could hit $87, up from $69 on March 18.
Why Now? The Trigger Points
The week of March 12-18 was pivotal:
- OPEC+ Meeting: On March 14, Saudi Arabia and Russia reaffirmed their commitment to cuts, defying pressure from smaller producers to pump more. X posts buzzed with “OPEC’s back in the driver’s seat.”
- U.S. Data: A March 13 EIA report showed U.S. inventories dropping 2 million barrels, signaling tighter markets.
- Tariff Noise: U.S. tariff threats, escalating by March 18, raised fears of costlier imports, nudging oil futures up 2% that day.
Goldman’s note warned: “Supply constraints are outweighing demand uncertainty. The market’s waking up.”
The Bull vs. Bear Debate
Not everyone’s sold on $90 oil:
- Bullish Case: Goldman points to a 2025 supply deficit of 800,000 bpd if OPEC+ holds firm. HSBC echoed this, pegging Brent at $88 by year-end.
- Bearish Pushback: Citi’s Ed Morse argued on March 17 that U.S. shale could ramp up, capping prices at $80. “Shale’s the wildcard,” he told Bloomberg.
- Middle Ground: Energy Aspects sees $85 as a ceiling unless Middle East disruptions spike.
Oil futures reflected the split: Brent rose 1.8% to $74.30 by March 18, but volatility spiked, with traders hedging bets.
Winners and Losers
A $90 oil price reshuffles the deck:
- Winners:
- Big Oil: ExxonMobil and Chevron could see Q3 profits jump 15%, per Morgan Stanley.
- OPEC Nations: Saudi Arabia’s budget, balanced at $81 oil, gets breathing room.
- Losers:
- Airlines: Delta and United face $2 billion in added fuel costs, per IATA estimates.
- Consumers: U.S. gas prices could hit $3.50/gallon by summer, up from $3.10 on March 18.
Small businesses, already squeezed by inflation, voiced pain on X: “$90 oil? My delivery costs just doubled.”
The Geopolitical X-Factor
Oil’s fate isn’t just about supply and demand—it’s a geopolitical chessboard:
- Middle East Tensions: A March 15 Houthi attack on a tanker near the Red Sea rattled markets. Insurance premiums for Gulf routes jumped 10%.
- Russia’s Role: Sanctions tightened on March 13, cutting Moscow’s exports by 200,000 bpd, bolstering OPEC+ cuts.
- U.S. Policy: Trump-era tariff talks, heating up by March 18, could disrupt global trade flows, indirectly lifting oil.
Goldman warned: “Any escalation could push us past $100.” The market’s holding its breath.
Market Moves: Energy Stocks Surge
Investors pounced between March 12 and 18:
- ExxonMobil: Up 4% to $115 by March 18, with analysts eyeing $130 if $90 hits.
- Occidental Petroleum: Gained 5.2%, fueled by its Permian Basin exposure.
- ETFs: The XLE energy fund rose 3.8%, its best week since January.
Trading volume in oil futures hit a 2025 high on March 17, per CME data, as speculators piled in.
The Green Angle: Renewables in the Shadow
Higher oil prices could jolt the energy transition:
- Boost for EVs: Tesla’s stock ticked up 1% on March 18 as analysts linked $90 oil to faster EV adoption.
- Solar and Wind: Goldman predicts a 5% uptick in renewable investments if oil sustains above $85.
- Catch-22: Expensive oil funds fossil fuel profits, delaying green tech scale-up.
Environmentalists on X lamented: “$90 oil should be a wake-up call, not a windfall.”
What’s Next?
The road to $90 hinges on:
- OPEC+ Resolve: Will smaller members like Nigeria cheat on quotas? A March 16 Reuters report hinted at cracks.
- Demand Proof: China’s PMI data, due March 31, will test Goldman’s rebound thesis.
- Wildcards: A Middle East ceasefire—or war—could swing prices $10 either way.
By March 18, oil markets were a cauldron of hope and fear. Goldman’s Currie told CNBC: “We’re in a supercycle’s early innings.” Skeptics, though, see a bubble ready to pop.
Why It Matters
Goldman Sachs’ $90 call on March 16, 2025, isn’t just a number—it’s a signal. From Wall Street to Main Street, oil’s trajectory will shape inflation, profits, and policy through 2025. Between March 12 and 18, the energy world shifted gears, and the ripple effects are just beginning. Whether it’s $90 or a bust, this week proved oil’s still the lifeblood of finance—and its pulse is racing.
