The U.S. Energy Information Agency (EIA) has released its latest Short-Term Energy Outlook (STEO), which now includes forecasts for 2026. The report assumes U.S. gross domestic product (GDP) will grow by 2% in both 2025 and 2026.
Global oil prices are expected to decline as production outpaces demand. Brent crude oil prices are forecasted to average US$74 per barrel in 2025, an 8% decrease from 2024, and drop further to US$66 per barrel in 2026, an 11% decline.
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Global liquid fuel production is projected to increase by 1.8 million barrels per day (b/d) in 2025 and by 1.5 million b/d in 2026. While OPEC+ is expected to raise output, it may produce below its stated targets to prevent inventory surpluses, according to the Agency. These projections do not account for the potential impact of U.S. sanctions on Russia’s oil sector announced on January 10.
U.S. crude oil production is anticipated to hit a record 13.5 million b/d in 2025, with slower growth of less than 1% in 2026, reaching 13.6 million b/d. The Permian Basin is expected to account for over half of U.S. production by 2026, offsetting declines in other regions. West Texas Intermediate (WTI) crude is forecasted to average US$62 per barrel in 2026, down from US$70 per barrel in 2025.
Global oil demand growth remains below pre-pandemic levels, with consumption increasing by 1.3 million b/d in 2025 and 1.1 million b/d in 2026.
Non-OECD (Organization of Economic Cooperation and Development) countries, particularly in Asia, are projected to drive demand growth, with India emerging as the leading contributor.
