Oil Glut: Analysts See Brent Dropping to $55 per Barrel in 2026
Brent crude is poised to end 2025 sharply lower than where it began, as mounting oversupply risks and a softening demand outlook raise the prospect that prices could test $55 per barrel in the first half of 2026, analysts say.
Geopolitical risks stemming from conflicts in the Middle East and the Russia-Ukraine war provided support for oil prices through much of 2025.
However, those risks were increasingly offset by concerns that US tariff policies could weigh on global growth, alongside easing tensions in the Middle East and renewed diplomatic efforts aimed at a ceasefire in Ukraine.
These dynamics helped cap geopolitical risk premiums, limiting price upside.
At the same time, eight OPEC+ producers — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman — moved to gradually unwind voluntary output cuts starting in April, improving the supply outlook. Rising production outside the alliance further weighed on prices, keeping Brent below $80 per barrel throughout the year.
Brent hit its 2025 high of $81.61 per barrel on Sept. 15 but failed to sustain gains. Prices slipped below $70 on March 5 for the first time since September 2024, before losses accelerated in April. On April 7, Brent settled at $64.29, its lowest close since April 2021.
The downward trend extended into the final quarter. Brent fell 2% on Oct. 28 to $63.83 and struggled to regain the $65 level. Prices reached a yearly low of $58.68 on Dec. 16, dipping below $60 for the first time since February 2021.
Brent started 2025 at $75.77 per barrel and ended the week beginning Dec. 22 at $60.40, marking a year-to-date decline of about 20.3%. Analysts see room for further downside in early 2026.
Despite elevated geopolitical tensions, oil prices showed only limited reactions over the year as ample supply — driven by strong output growth outside OPEC+ — kept the market well supplied, independent oil market analyst Gaurav Sharma told Anadolu agency.
According to Sharma, OPEC+ entered the year with a focus on defending market share rather than targeting a specific price level. As demand concerns mounted and non-OPEC production continued to rise, the group shifted toward a more cautious supply management stance toward year-end.
He said Brent’s struggle to hold above $60 reflects a widening imbalance between supply and demand, noting that “there is simply too much oil in the market.”
Global demand growth, Sharma added, could have been met by non-OPEC supply alone even before OPEC+ began easing its cuts, meaning the alliance’s decision to add barrels back has amplified surplus risks.
With output rising in countries such as the US, Brazil, Guyana, Canada and Norway alongside OPEC+ supply, Sharma expects a surplus to emerge in the first and second quarters of 2026, particularly in light, low-sulfur crude grades that are easier for refineries to process.
“The headline surplus could reach as much as 500,000 barrels a day in both quarters,” he said.
Sharma noted that OPEC+’s production strategy in 2026 will depend largely on how market conditions unfold in the first quarter. “Unless the situation deteriorates significantly and the $50 Brent floor comes under threat, the group is more likely to hold output steady rather than return to deeper cuts,” he said.
Global oil demand growth next year is expected to range between 1 million and 1.3 million barrels a day, Sharma said, adding that not all additional supply is likely to be absorbed, leaving oversupply risks most pronounced in the first half of the year.
Brent could trade below $60 during that period, with a test of $55 possible, Sharma said.
Prices could fall further in the event of a broader economic slowdown, particularly if a peace agreement is reached in Ukraine. In the second half of 2026, prices may recover toward $60, provided the global economy avoids a sharper downturn.
“The biggest risk for the oil market next year is clearly oversupply, especially of light sweet crude in Asian markets,” he added. #Oil Glut: Analysts See Brent Dropping to $55 per Barrel in 2026#
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