The global crude oil market will
enter 2026 on a weaker footing. This is because the combined effects of
sustained high supply, subdued demand growth, and ongoing global energy
transition continue to exert downward pressure on prices. Despite intermittent
geopolitical issues, the fundamental imbalance between supply and demand is expected
to remain a dominating factor in price movements next year. MARC Ratings
forecasts Brent crude prices to average between USD60 per barrel (bbl) and
USD70/bbl in 2026, marking a further moderation from 2025 forecast levels of
around USD68/bbl–USD69/bbl (year-to-date October 2025: USD69.30/bbl).
Supply dynamics will remain a key
determinant of oil price direction. OPEC+ is expected to gradually ease its
voluntary production cuts, which began in May 2025 and further relaxed in
September 2025. Saudi Arabia, Iraq and the United Arab Emirates, are expected
to lead supply normalisation, with a collective output of around 17.7 million
barrels per day (mbpd) to the global supply in November 2025 (2024 average:
15.7 mbpd). At the same time, non-OPEC producers, particularly the United
States (US), are projected to sustain their output. According to the US Energy
Information Administration (EIA), US crude oil production could remain
unchanged at 13.5 mbpd in 2026, supported by government policies to enhance
energy security as well as continued efficiency gains and cost optimisation.
Combined, these developments are expected to support the total global oil
supply, with production forecast to be at 107.2 mbpd in 2026 (2025: 105.9
mbpd), representing an annual growth rate of 1.2% (2025: 2.6%).
On the demand side, global
consumption of oil is anticipated to remain sluggish, constrained by the
structural shift towards renewable energy and improvements in energy
efficiency. China, which accounts for around 16% of global consumption,
continues to face headwinds from the weak property and manufacturing sectors,
while accelerating its efforts to decarbonise. The EIA projects Chinese oil
demand growth to be a mere 1.4% in 2026 (2025: -1.5%) compared to an average of
around 3.5% during the post-pandemic rebound years. Elsewhere, demand in
Organisation for Economic Co-operation and Development (OECD) economies will
likely remain subdued due to ongoing electrification of transport and energy
efficiency measures, while India may continue to provide a modest offset
through steady consumption growth. India is expected to increase its demand by
1 mbpd, the largest increment globally. Overall, global oil demand growth is
projected to reach 105.1 mbpd in 2026, expanding from the 104.0 mbpd in 2025,
relatively sustaining the growth pace at 1.1% (2025: 1.0%).
The demand/supply ratio is
projected to remain below parity in 2026, as production is expected to exceed
consumption, consistent with the persistent oversupply trend. This marks a
clear shift from the tight market conditions of 2022. The expected moderation
in the ratio to around 0.96–0.97 reflects the combined effects of steady
non-OPEC output, easing OPEC+ cuts, and soft demand growth.
MARC Ratings expects Brent oil prices to remain within the USD60/bbl–USD70/bbl range in 2026. Upside risks include the escalation of geopolitical conflicts involving major producers, a slower-than-anticipated return of OPEC+ supply, or stronger-than-expected global economic growth. Conversely, downside risks stem from a faster recovery of OPEC+ output, persistent oversupply, or accelerated clean energy adoption that further weakens demand. Overall, the crude oil market in 2026 is likely to remain characterised by ample supply, cautious demand, and constrained price upside, a reflection of a global energy system in gradual transition.
Reference:
MARC
Ratings Press Announcement: Oil Prices to Stay Under Pressure in 2026,
12 November 2025
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