Global crude oil prices have entered a decidedly bearish phase, with ICE Brent falling from last week’s high of US$70 per barrel to US$65 on October 5 following OPEC’s announcement of a production increase.

Analysts at Rystad Energy warn that, under current market conditions, prices are unlikely to sustain levels above US$60–$65 per barrel in 2026 unless OPEC+ alters its strategy or geopolitical sanctions significantly curb exports from Russia and Iran.

Susan Bell, senior vice president for commodity markets – oil at Rystad Energy, said: “The market has flipped from tight to tepid, with further production increases from OPEC+ testing price support.

“Supply is only moving in one direction, and with demand weakening, the remainder of 2025 will be a one-two punch for crude prices.

Bell said that global liquids balances have clearly shifted into surplus after a period of tight supply that lasted from mid-2024 through 2025.

She explained that this shift has been driven by the gradual rollback of OPEC+ production cuts, which are set to increase supply by nearly 2.5 million barrels per day in the second half of 2025, alongside ongoing growth in non-OPEC+ production.

“This isn’t a blip; it’s a clear evolution as we approach 2026,” said Bell.

“The implications extend well beyond the remainder of this year, with 2026 set to inherit both higher stock levels and looser fundamentals, placing sustained pressure on crude prices.”

In the fourth quarter of 2025, global liquids balances are forecast to show a surplus of around 2.2 million bpd, compared to near balance in the third quarter.

OPEC+ is expected to raise output by roughly 1 million bpd quarter over quarter, while US supply will continue modest growth of about 120,000 bpd despite indications that shale production may be plateauing.

Additional contributions from Guyana, Argentina, and Canada will push non-OPEC+ supply growth up by nearly 450,000 bpd.

On the demand side, 4Q25 consumption is projected to fall by 230,000 bpd from the previous quarter, driven by seasonally weaker transport fuel use in OECD markets.

This widening supply-demand gap is expected to lead to inventory builds, reducing the market’s sensitivity to potential disruptions.

By the end of 2025, crude oil supply is set to exceed demand by more than 2.5 million bpd, while total liquids show a surplus near 2.2 million bpd, marking a sharp departure from the tighter balances seen in 3Q25.

Looking ahead, oversupply is expected to persist into 2026.

Rystad projects annual liquids supply growth of approximately 2.5 million bpd, led by returning OPEC+ volumes and consistent expansion from Brazil, Canada, and Guyana.

Global demand growth is forecast to remain below 1 million bpd, weighed down by sluggish economic momentum in OECD countries and the waning recovery of post-pandemic air travel.

This imbalance could result in a surplus exceeding 2 million bpd for the year, especially in the first half. Price risks are shifting toward $50 per barrel or lower if inventories continue to expand.

WTI prices are additionally at risk from resilient US production and possible Cushing stock builds, although differentials to ICE Brent may hold support due to the tight US midcontinent balance stemming from Canada’s Trans Mountain pipeline commissioning in 2024, which redirected about 0.5 million bpd of Canadian crude to other regions.

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