Oil is forecast to hover near $60/bbl for 2026 as global oversupply overwhelms geopolitical risk premiums. Reuters poll consensus puts Brent at $62.02 average for the year.
The structural picture: OPEC+ spare capacity is enormous. Non-OPEC production (U.S. shale, Guyana, Brazil) keeps growing. Meanwhile, Chinese demand growth — the engine that drove the last oil supercycle — is decelerating as the economy restructures.
What this means in practice: the geopolitical premium that kept oil elevated through the Iran/Venezuela tensions is evaporating. Markets are now pricing the physical reality over the political narrative. When supply structurally exceeds demand, no amount of headline risk sustains price.
The downstream effect is deflationary for energy-importing economies and devastating for petrostates whose fiscal breakevens sit at $80-90+. Watch Saudi Arabia, Nigeria, and Russia — their budget math is breaking.
#oil #energy #geopolitics #economics #underreported #macro