Oil surplus ahead: IEA, Goldman Sachs and JPMorgan expect price pressure in 2026

• IEA and banks expect an oil surplus and weak demand in 2026
• Goldman Sachs and JPMorgan are sticking to forecasts
• Consumers are likely to benefit from depressed oil prices

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Oil surplus in 2026?

According to the International Energy Agency (IEA), the global oil market is heading towards significant oversupply. According to Reuters, the agency now expects a surplus volume of up to 4 million barrels per day for 2026, compared to the previous estimate of 3.3 million. The additional supply would therefore correspond to almost four percent of global demand – a value that significantly exceeds the forecasts of other market analysts.

The main reason for this is the decision by OPEC+ to lift its previously agreed production cuts more quickly than planned. In addition to the OPEC member states, countries such as the USA, Canada, Brazil and Guyana are also contributing to the increase in supply. The IEA expects global oil supply to grow by around three million barrels per day this year and to increase by another 2.4 million barrels in 2026. In September, global production increased by 5.6 million barrels compared to the previous year – the largest increase since the start of the pandemic.

Falling demand?

While supply is increasing, the demand side remains well below expectations. The IEA already cut its global demand growth forecast for 2025 to 710,000 barrels per day, around 30,000 barrels less than previously estimated. The authority also expects only a small increase in 2026, as a weak economy and increasing electrification of transport are dampening consumption growth: “This is well below the historical trend, as a harsher macroeconomic environment and the electrification of the transport sector are leading to a significant slowdown in oil consumption growth.”

This places the IEA at the lower end of the industry estimates. OPEC itself, however, remains much more optimistic and expects demand to increase almost twice as much to 1.3 million barrels per day in 2025. If the IEA forecast is confirmed, the oil market could enter a phase of sustained overproduction and price pressure next year.

This is what Goldman Sachs and JPMorgan expect for oil prices

Both Goldman Sachs and JPMorgan also expect a weak oil market for 2026. Goldman Sachs expects a global oversupply of around 1.9 million barrels per day next year, slightly above its previous forecast, according to a Reuters report. The increase is primarily due to increasing production volumes in North and South America, which compensated for lower Russian production and subdued demand. Despite the forecast surplus, the bank is sticking to its price forecast of $56 per barrel for Brent and $52 for WTI. The risks are “two-sided, but slightly upwards.”

Goldman also points to the planned withdrawal of OPEC+ production cuts by 1.65 million barrels per day. According to the bank’s assessment, the association will react flexibly and, if necessary, take countermeasures from January 2026 if OECD inventories increase. Overall, Goldman expects global oil reserves to build slowly until the end of 2026.

JPMorgan Research also remains cautious: Analysts see oil prices under pressure until 2026 and leave their forecast for Brent at $58 for 2026. Commodity strategist Natasha Kaneva points out that the US government under President Trump is specifically aiming for low oil prices to combat inflation and is only likely to intervene when prices fall below $50.

The bank also expects demand to remain subdued while global supply continues to increase. Several OPEC states and partner countries are investing heavily in new production capacities, particularly in the Middle East. According to JPMorgan, over $10 billion will flow into the upstream sector annually by 2027.

This combination of oversupply and weak demand is likely to continue to put pressure on prices – but it will have a positive effect for consumers: cheaper energy prices could reduce fuel costs, curb inflation and noticeably strengthen the purchasing power of US households in particular.

Editorial team finanzen.net

This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.

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