Brent crude averaged $80 per barrel in 2024. The U.S. Energy Information Administration now forecasts it will fall to $58 in 2026 and $53 in 2027—a decline of more than one-third in three years. The reason: global oil production is growing faster than demand, and inventories are piling up at a rate not seen since the pandemic.
The market faces a structural imbalance. Supply is expanding from Brazil's deepwater fields, Guyana's offshore bonanza, and Argentina's Vaca Muerta shale formation—while OPEC+ sits on 3.24 million barrels per day of cuts it cannot unwind without crashing prices further. Meanwhile, China continues absorbing roughly 1 million barrels daily into strategic reserves, temporarily masking the full extent of the glut.