The U.S. Power Data Administration (EIA) projected that the Brent spot common worth will drop in 2026 and 2027 in its newest quick time period vitality outlook (STEO), which was launched this week.
In keeping with this STEO, the EIA sees the commodity coming in at $55.87 per barrel this 12 months and $54.02 per barrel subsequent 12 months. The Brent spot worth averaged $69.04 per barrel in 2025, the STEO highlighted.
A quarterly breakdown included within the EIA’s January STEO projected that the Brent spot worth will common $58.93 per barrel within the first quarter of 2026, $56.00 per barrel within the second quarter, $55.35 per barrel within the third quarter, $53.34 per barrel within the fourth quarter, $53.00 per barrel within the first quarter of 2027, $54.00 per barrel throughout the second and third quarters of 2027, and $55.00 per barrel within the fourth quarter of subsequent 12 months.
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In its STEO, the EIA highlighted that the Brent crude oil spot worth averaged $63 per barrel in December 2025, which it identified was $11 per barrel decrease than the common in December 2024.
“Crude oil costs fell, or have been flat, in each month throughout the second half of 2025 (2H25),” the EIA mentioned in its outlook report.
“Rising crude oil manufacturing and rising oil in floating storage outweighed the impact of potential disruptions to grease exports pushed by tensions in Russia and Venezuela,” it added.
“We forecast that rising world oil manufacturing will proceed to drive excessive world oil stock builds by way of the forecast, inflicting crude oil costs to fall by way of 2026. Nonetheless, stock builds start to progressively reasonable subsequent 12 months, stemming worth declines,” it continued.
“Sturdy world oil manufacturing progress outpaced consumption progress, driving our evaluation that world oil inventories rose shortly in 2H25. We anticipate this pattern to proceed in each 2026 and 2027, though at a lowering fee in 2027 as provide progress begins to sluggish and world oil demand progress will increase to 1.3 million barrels per day from 1.1 million barrels per day in 2026,” the EIA went on to state.
The EIA projected in its report that world oil stock builds will common 2.8 million barrels per day in 2026, which it mentioned “is just like this 12 months’s improve”. It forecast within the STEO that builds will common 2.1 million barrels per day in 2027.
In its report, the EIA went on to notice that “there are indicators rising volumes of oil are accumulating in transit on the water or in floating storage”, which the EIA mentioned “have begun to weigh on oil costs”.
“Nonetheless, the surplus provide that we estimate constructed up final 12 months has not but been totally mirrored in observable inventories of crude oil resembling these at storage hubs in Cushing, Oklahoma, or the U.S. Gulf Coast,” it added.
“We anticipate that decrease near-term oil costs relative to these for oil deliveries additional sooner or later (in different phrases, contango market construction) will encourage market members to start to retailer crude oil on land till provide and demand imbalances reasonable and stock builds lower,” the EIA mentioned.
The EIA acknowledged in its January STEO that China’s continued strategic stock builds present a significant supply of assist for crude oil costs going ahead.
“We assess that a big portion of oil stock builds throughout 2025 went into strategic stockpiles in China. As a result of these strategic builds acted as a supply of demand, just like the consumption of oil, they restricted downward worth actions typically related to massive stock accumulation,” the EIA famous.
“We assume that China will proceed constructing strategic stockpiles at practically the identical fee of slightly below 1.0 million barrels per day in 2026 earlier than lowering its fee of strategic builds by practically a 3rd in 2027,” it added.
The EIA additionally highlighted in its STEO that, though it forecasts OPEC+ will produce nearly 0.9 million barrels per day much less on common than its present focused manufacturing in 2026, it expects “a lot of this shortfall to be pushed by underproduction from members resembling Russia and Mexico as a consequence of sanctions and declining productiveness, respectively”.
“Of the 9 OPEC members topic to manufacturing targets (a gaggle that excludes Iran, Libya, and Venezuela), we anticipate manufacturing will monitor carefully with acknowledged targets throughout 2026,” the EIA identified.
“On January 4, OPEC+ reaffirmed plans to maintain manufacturing flat within the first quarter of 2026 (1Q26), however allowed for future changes, together with plans to re-evaluate the utmost sustainable manufacturing capability for use in setting 2027 manufacturing targets when the group meets in 4Q26,” the EIA highlighted.
“Regardless of no plans to announce 2027 targets till 4Q26, we don’t anticipate OPEC+ will improve manufacturing subsequent 12 months given our expectation of huge stock builds over the forecast interval,” it mentioned.
The EIA additionally warned in its January STEO that “evolving situations” in Venezuela stay a “key uncertainty” in its forecast.
“The oil blockade and the interception of sanctioned oil tankers close to Venezuela halted most of Venezuela’s oil exports, leading to manufacturing shut-ins. We estimate that about 0.6 million barrels per day of Venezuela’s oil exports are at the moment disrupted, and an equal quantity of manufacturing has been shuttered,” the EIA mentioned.
“Most of those volumes probably would have been exported to China. Our forecast assumes that sanctions on Venezuela stay in place all through the forecast,” it added.
“Any sanctions rest or different U.S. authorities coverage modifications associated to Venezuela that would lead to extra oil manufacturing than we assumed on this forecast would put further downward stress on oil costs,” the EIA went on to state in its January STEO.
Rigzone has contacted the Division of Data and Press of the Russian Ministry of Overseas Affairs, the Venezuelan embassy within the UK, the Worldwide Press Middle of China’s Ministry of Overseas Affairs, OPEC, Mexico’s Ministry of Overseas Affairs, and the White Home for touch upon the EIA’s January STEO. On the time of writing, not one of the above have responded to Rigzone.
To contact the creator, e-mail andreas.exarheas@rigzone.com
