Oil Prices: 2026 Forecast Slashed $10 Amid Oversupply Fears

The global oil market is navigating a period of uncertainty, with forecasters significantly lowering their 2026 price predictions. Analysts surveyed by Reuters now anticipate an average of $62 per barrel for 2026, a steep $10 reduction from earlier projections. This pessimism is fueled by expectations of a substantial supply surplus, with the International Energy Agency projecting an extreme deficit of 4.2 million barrels per day.

While the consensus points towards lower prices, some factors might provide a price floor. Declining US shale output is expected to commence next year, potentially stabilizing WTI prices around $59 per barrel. However, persistently high freight costs are currently limiting the flow of Atlantic Basin oil to Asia, a situation that could change with easing shipping rates, further impacting market dynamics.

In terms of market activity, Chevron has entered into an agreement to explore oil and gas blocks in Nigeria's deepwater region with TotalEnergies. Elsewhere, Targa Resources is expanding its natural gas processing capacity through an acquisition, BP has fully restarted its Olympic Pipeline, and ExxonMobil is reportedly in discussions regarding an Iraqi oil project. Barrick Mining is also considering spinning off its North American gold assets.