Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
Oil prices are set to decline for a fourth consecutive year in 2026 amid slowing global demand growth and a strong increase in supply, according to Emirates NBD Research.
The bank forecasts Brent crude to average $60 per barrel next year, down from about $68/b in 2025, while WTI is expected to average $55/b, compared with $65/b this year.
The report said the expected drop would mark the longest multi-year price slide since the period following the 2014–16 downturn. “This would represent the fourth year in a row of oil price declines with 2022 marking the most recent peak in prices,” the research noted.
Emirates NBD Research said the oil market enters 2026 “with at best a modest outlook,” with demand growth closely mirroring the moderate global economic expansion projected by the IMF, World Bank and major forecasters. It added that demand growth is unlikely to accelerate next year, and projections among key agencies remain sharply divided: OPEC expects global oil demand to rise 1.4 million barrels per day (bpd) in 2026, while the IEA estimates a slower 860,000 bpd increase, with OECD consumption expected to decline.
Jet fuel demand, which supported consumption growth in recent years, is also set to cool. Based on planned flight schedules, the report said global jet fuel demand growth will slow to less than 4% year-on-year in the first half of 2026, compared with an average of more than 12% between 2023 and 2025.
On the supply side, Emirates NBD Research said the outlook is clearer, pointing to a strong year of growth from both OPEC+ and non-OPEC+ producers. Output from the US, Canada, Brazil, Colombia and Guyana is projected to rise by more than 800,000 bpd, nearly matching IEA’s expected global demand increase for the year. The US is expected to produce about 13.5 million barrels of oil per day by the end of 2026.
OPEC+, which has been unwinding production restraint since April 2025, is set to continue raising output as it prioritises market share over price stability, the report said. The alliance is expected to produce nearly 3 million bpd more in Q1 2026 compared with a year earlier. “Production restraint to support prices was allowing competitors to take market share away from OPEC+ without prices managing to hold to elevated levels,” the report noted.
With moderate demand and a sharp rise in supply, Emirates NBD Research expects the market to move into a “considerable surplus” next year. Using IEA’s projections, the report estimates an average 4 million bpd surplus in 2026—larger than the glut seen in 2020 during the height of the pandemic.
Risks to the forecast are “tilted to the downside,” the report said. An end to the Russia-Ukraine conflict that allows Moscow to increase exports would add to global supply, while escalating US-China trade tensions would depress demand. Upside risks are harder to predict, it added, noting that markets have become more resilient to geopolitical shocks.
