2026 Oil Market Outlook: Surplus Projections Shift Dynamics

The OPEC+ report forecasts a small oil market surplus in 2026, shifting from earlier deficit projections. Despite production increases, demand forecasts for OPEC+ crude have been lowered. Contrasting views exist between OPEC and the International Energy Agency regarding future supply and demand. Global economic growth remains robust, supporting oil demand.

In a notable shift from previous forecasts, an OPEC report released on Wednesday highlights a potential modest surplus in the global oil market for 2026. This surplus projection follows OPEC+ production increases and contributions from other oil producers.

The organization, along with its allies, plans to halt production hikes in early 2026 amid broad predictions of market oversupply. Despite efforts to up production, October saw a slight drop in output due to decreased production in Kazakhstan.

The report also reveals divergent views between OPEC and the International Energy Agency (IEA) on future supply and demand. While OPEC holds a bullish demand forecast, the IEA anticipates a supply glut. Nevertheless, OPEC maintains its projection for global demand growth, bolstered by the resilient global economy.

(With inputs from agencies.)