Brent crude to average $56/bbl in 2026 – EIA

The US Energy Information Administration (EIA) expects the Brent crude spot price to hover near $56/bbl in 2026, about 19% less than in 2025.

IMAGE: The 700 million bbls of oil stored in underground salt caverns to be used in case of war or global crisis. Getty Images

Brent’s price is expected to fall in the coming months, largely due to ample growth in global oil inventories, the EIA said in its latest oil market report.

“We expect oil prices will decline in 2026, as global oil production exceeds global oil demand, causing oil inventories to rise,” the EIA said.

The US-based agency expects Brent crude’s price to average around $54/bbl in 2027.

While the EIA expects Brent crude’s price to soften further in the months ahead, it notes that inventory builds are expected to gradually moderate in 2027, stemming the price decline.

The US energy agency expects global oil inventories to increase by an average of 2.8 million b/d in 2026, largely matching the previous year’s rise.

“China’s continued strategic inventory builds provide a major source of support for crude oil prices going forward,” the energy agency said in its January short-term energy outlook (STEO) report.

Supply and demand estimates

If existing sanctions on Venezuela remain in place through 2027, global liquid fuels production is expected to grow by 1.4 million b/d to reach 107.6 million b/d in 2026, the EIA said.

Global liquid fuels production growth in 2026 is forecast to be driven by crude oil output growth from OPEC+, while the production growth outlook for 2027 is led by countries outside OPEC+, primarily in Latin America, the EIA added.

In 2027, total production is projected to grow by another 500,000 b/d to touch 108.1 million b/d.

“Global liquid fuels production growth comes almost entirely from non-OPEC+ countries in 2027 as OPEC+ targets are assumed to remain at 2026 levels and the group’s production levels are largely unchanged,” the EIA said.

OPEC liquid fuels production is expected to average around 33.9 million b/d this year. The Saudi Arabia-led coalition will further increase production by another 100,000 b/d to 34.1 million b/d in 2027, the US-based agency said.

Notably, US crude oil production is expected to decline by about 1% in 2026 and by 2% in 2027. It reached an annual record of 13.6 million b/d last year.

The US energy agency forecasts global liquid fuels demand to grow by 1.1 million b/d in 2026 to average 104.8 million b/d – about 100,000 b/d higher than its previous projection.

Global liquid fuels consumption growth will be majorly driven by non-OECD countries, the EIA said. In China, total consumption is expected to increase by more than 200,000 b/d in 2026 and 2027.

Meanwhile, consumption in India is expected to increase by almost 300,000 b/d in both the years. “Consumption growth rises next year as global economic activity picks up pace,” the EIA noted.

Global demand is expected to grow by 1.3 million b/d in 2027, to average around 106 million b/d, according to the energy agency.

By Aparupa Mazumder

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