Oil prices have been steadier for the past couple of days back below $70 a barrel, and traders in options markets, as analysed by Goldman expect it to stay there.

We won’t get into their methodology – it’s all to do with overlapping butterfly spreads – but, on their sums, option markets see a 60% chance that Brent will stay in the $60s in 3 months and a 28% probability that it’ll exceed $70.

The market’s most likely outcome for December 2025 is also that prices stay in the $60s, though that’s just over a 35% chance, with over a 20% chance both of it dropping into the $50s and rising to the $70s.

Options markets also see limited chance of a major disruption that would push prices above $90 a barrel. That probability has retreated from a peak of around 15% to its very low early-June level and is now below 4%.

“Overall, the sharp drop in the geopolitical risk premium likely reflects traders’ recent experiences with major geopolitical shocks without significant oil disruptions, Iran’s restrained response, strong US and China economic incentives to avoid large oil supply disruptions, and the reluctance of many investors to position for price upside given the expected shift to large inventory builds from the fall,” write Goldman.
Source: Reuters (Alun John)