Oil outlook 2026 is anchored by a simple base case: too much supply. A Reuters poll of 34 economists and analysts projects Brent crude will average $61.27 a barrel in 2026, down from $62.23 in the prior poll. The same poll sees U.S. WTI averaging $58.15.
The oversupply baseline behind oil outlook 2026
Oil outlook 2026 assumes supply growth outpaces demand growth for much of the year. Reuters reported poll participants expect a surplus of roughly 0.5 to 3.5 million barrels per day in 2026. That range implies price caps during demand slowdowns.
The International Energy Agency has also flagged a large surplus. Reuters reported the IEA trimmed its 2026 surplus forecast to 3.84 million bpd, from 4.09 million bpd. Even after that cut, the market still looks long.
Supply growth is broad-based. The IEA has said non-OPEC+ supply growth remains robust, led by the United States and the Americas. In an IEA commentary, the agency projected global oil supply rising by 2.4 million bpd in 2026.
This is why oil outlook 2026 leans bearish on averages. It also explains why headlines need a shock to lift prices.
OPEC+ policy is a stabilizer, not the driver
Oil outlook 2026 still depends on OPEC+. Yet OPEC+ has been cautious about abrupt changes. Reuters noted the poll was conducted before an OPEC+ meeting that left output unchanged. Analysts said holding quotas steady supports prices, but does not erase the surplus.
OPEC also publishes a more balanced view. Reuters reported OPEC data suggested supply and demand could match more closely in 2026. That contrast keeps uncertainty high around the true surplus size.
Even so, oil outlook 2026 is not defined by OPEC discipline alone. It is defined by how much non-OPEC supply arrives.
Iran is the swing risk in oil outlook 2026
Oil outlook 2026 can change quickly if Iran exports are disrupted. Traders treat Iran as a geopolitical volatility trigger. The risk is not only barrels. It is shipping routes, insurance, and enforcement uncertainty.
Fitch Ratings said global oversupply can offset output uncertainty in Iran and Venezuela. Fitch added that the geopolitical oil risk premium is likely to remain capped by oversupply, even if volatility rises.
That view fits recent pricing action. Reuters reported oil steadied as easing Iran tensions reduced the chance of near-term disruption. The report linked the move to lower perceived odds of a U.S. attack that could hit Iranian supply.
So oil outlook 2026 becomes a two-track story.
Oversupply sets the average.
Iran risk sets the spikes.
What oversupply means for inflation and FX
Oil outlook 2026 matters most for inflation paths and rate expectations. Lower average crude prices reduce fuel pass-through. They also ease pressure on trade balances for importers.
For South Asia, oil outlook 2026 can shape headline CPI surprises and currency stress. For petrostates, oil outlook 2026 can tighten fiscal space and slow spending plans.
The key point is timing. Even with a low average, short spikes can still hit fuel subsidies and freight costs.
What to watch next
Oil outlook 2026 will hinge on three practical indicators.
Iran supply and shipping signals
Any change in sanctions enforcement, conflict risk, or shipping warnings can move the curve. Reuters has shown the market responds to rhetoric quickly.
Non-OPEC growth and inventories
Inventory builds are the proof of surplus. Reuters noted U.S. inventories have already influenced near-term pricing in January.
OPEC+ messaging on “volume versus value”
If prices slip below comfort, OPEC+ could change course. Yet the poll’s surplus range suggests cuts would need to be meaningful to reset oil outlook 2026.
Bottom line
Oil outlook 2026 is bearish on averages and bullish on volatility. The Reuters poll centers Brent around $61.27, with WTI near $58.15, because supply growth looks stronger than demand. Iran remains the swing risk, but Fitch argues the oversupply cushion can mute the lasting price impact.