EIA cuts Brent price forecast for 2025 and 2026

Brent’s price is expected to fall sharply in both 2025 and 2026, largely due to rising global oil inventories after OPEC’s move to accelerate oil production, the EIA said in its latest oil market report.

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The US Energy Information Administration (EIA) projects that the Brent crude spot price will average around $58/bbl in the fourth quarter of this year, as global oil supply exceeds annual demand and drives-up oil inventories.

The EIA has also revised its 2026 forecast down to an average of $51/bbl – about $7/bbl lower than its previous forecast.

The revised forecasts come after OPEC+ producers announced they will increase their combined output beyond previously slated levels. Earlier this month, the coalition agreed to collectively increase supply by 547,000 b/d in September.

The US energy agency now expects global oil inventory builds to average more than 2 million b/d between the fourth quarter of this year and the first quarter of 2026, which is about 800,000 b/d more than in last month’s projections.

“Significant growth in oil supply will cause crude oil prices to fall in the coming months,” the energy agency said in its August short-term energy outlook (STEO) report.

Supply and demand estimates

Global liquid fuels and petroleum production is expected to reach 105.4 million b/d in 2025, about 750,000 b/d higher than the previous estimate, the EIA said. “OPEC+ will contribute half of this increase,” the agency added.

Notably, US crude oil production is projected to average a bit more than 13.4 million b/d in 2025 and a bit less than 13.3 million b/d in 2026. The decline in oil output next year comes largely due to lower oil prices and fewer active drilling rigs, the agency noted.

OPEC+ crude oil production is expected to hit 36.6 million b/d this year – an increase of about 470,000 b/d from the agency’s previous estimates. The Saudi Arabia-led coalition will further increase crude oil production by another 460,000 b/d to reach 37.02 million b/d in 2026, the US-based agency projected.

However, the potential for OPEC+ to revisit production plans “given the expectations of significant oversupply beginning later this year” could affect future production levels and limit the downward pressure on oil prices, the EIA said.

The US energy agency forecasts global oil demand to average 103.7 million b/d in 2025, about 200,000 b/d more than its previous estimate. Lower oil prices will be a key driver of demand.

In 2026, global oil demand is projected to average 104.9 million b/d. “Falling oil prices will also cause a small increase in demand in 2026,” the agency said.

By Aparupa Mazumder

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