Goldman Sachs warns of sharp global oil demand decline
Goldman Sachs has warned that global oil demand fell more sharply than previously expected, citing an estimated reduction of 4 to 5 million barrels per day in April. The decline is linked in part to disruptions in maritime flows through the Strait of Hormuz, which temporarily reduced global consumption by around 4 to 5 percent. The assessment points to a significant short-term shock in energy markets driven by both logistical constraints and weaker underlying demand.
The bank said the imbalance between supply and demand could create downward pressure on its price outlook for 2026. It maintained its forecast for Brent crude at 90 dollars per barrel in the fourth quarter of 2026 and West Texas Intermediate at 83 dollars per barrel, while acknowledging increased risks to these projections. A sustained demand shortfall could erode pricing power as the market moves toward the second half of the forecast period.
Weakness in consumption has been concentrated in China and Western Europe, where April retail fuel sales came in below expectations. The analysis combined refinery throughput data, high frequency indicators of oil consumption, and comparisons with other market forecasts and trading estimates. Industrial activity in parts of Asia, including the chemical sector, also showed signs of slowdown, reinforcing concerns about broader demand softness across key consuming regions.
At the same time, supply risks continue to shape market expectations. The Strait of Hormuz accounts for roughly one fifth of global oil and liquefied natural gas shipments, making it a critical chokepoint for energy flows. Tensions linked to the United States and Iran have added uncertainty to maritime security in the region, even as crude prices recorded weekly fluctuations driven by shifting expectations over possible de-escalation. The bank also pointed to inflation-driven changes in consumer behavior as a potential additional variable affecting demand in the coming year.
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