Goldman Sachs on U.S. Presidential Election and Oil Supply

(Reuters) – Goldman Sachs said on Thursday that regardless of who wins the U.S. presidential election in November, there are limited tools available to significantly boost domestic oil supply next year.

Strategic Petroleum Reserve and Regulatory Easing

The bank suggested that current stocks in the strategic petroleum reserve are low and that any regulatory easing might only lead to a significant boost in long-term U.S. oil supply.

Oil Prices React to U.S. Economic Data

Oil prices experienced a slight increase on Friday following the release of U.S. economic data that surpassed analyst expectations, which raised investor expectations for increased crude oil demand from the world’s largest energy consumer.

Current Oil Prices

• Brent crude futures for September: approximately $82 per barrel
• U.S. West Texas Intermediate crude for September: approximately $78 per barrel

Price Forecast

Goldman Sachs expects Brent prices to range from $75 to $90 in 2025, presuming trend-like growth in gross domestic product (GDP), steady oil demand, and market balancing by OPEC and its affiliates.

Trade Policy Uncertainty

Despite uncertainties surrounding trade policy, Goldman Sachs believes tariffs on U.S. crude imports seem unlikely.

Potential Tariff Impacts on Oil Prices

The bank forecasts oil prices could decrease by as much as $11 per barrel next year due to weaker demand and GDP if a 10% across-the-board tariff on goods imports is imposed. Conversely, if the Federal Reserve delays interest rate cuts beyond 2025 due to higher core inflation, oil prices may fall by as much as $19, projecting Brent at $62 in Q4 2025, compared to a current forecast of $81.