In a shifting landscape for global energy markets, oil prices are projected to decline steadily through 2026, driven by an oversupply in production and a muted increase in demand. With geopolitical tensions and international trade disputes contributing to an uncertain economic environment, analysts are forecasting a significant easing in oil prices across both Brent and West Texas Intermediate (WTI) benchmarks.
Brent crude oil is expected to average around $63 per barrel during the remainder of 2025, with a further decline to approximately $58 in 2026. Similarly, WTI prices are projected to average $59 in 2025 and drop to $55 in the following year. This forecast marks a notable departure from the highs seen in recent years, reflecting a new phase of stabilization amid fluctuating economic conditions.
A major factor influencing this trend is the increasing global supply of oil. Projections indicate a surplus of 800,000 barrels per day in 2025, with that figure climbing to 1.4 million barrels daily in 2026. This excess is largely attributed to higher output levels from key producing nations, including members of OPEC+ as well as significant non-OPEC contributors. Despite ongoing efforts to balance the market through voluntary production cuts, the pace of supply growth continues to outstrip that of demand.
On the demand side, global consumption is expected to grow by only 300,000 barrels per day from the end of 2024 to the end of 2025. This modest increase is being shaped by a combination of economic headwinds and the ripple effects of escalating trade tensions. Tariff hikes, including some as high as 125% on select imports, have dampened business confidence and slowed economic expansion in several key markets, thereby curbing energy consumption.
Should the current economic trajectory persist, or if production cuts are reversed, oil prices could experience even sharper declines. Some forecasts suggest that Brent crude could fall into the $40 range in 2026. In a worst-case scenario, prices may dip below that threshold, a development that would significantly impact oil-dependent economies and global financial markets
The outlook for global oil prices over the next two years paints a complex picture. While lower prices could provide relief for oil-importing nations and consumers, they may pose serious challenges for producing countries reliant on hydrocarbon revenues. Furthermore, sustained price volatility can create uncertainty for investors and disrupt capital flows within the energy sector.
This anticipated downturn also underlines the importance of diversification for resource-dependent economies and the strategic need for energy producers to adapt to shifting global demand patterns. As the world navigates a delicate balance between economic recovery and geopolitical tension, stakeholders across the energy landscape will need to monitor developments closely and remain agile in their planning.
Ultimately, the coming years are likely to test the resilience of global oil markets, as they adjust to a new equilibrium shaped by both economic fundamentals and strategic policy decisions.