Global crude oil prices to decline in 2025 and 2026, US agency forecasts

The U.S. Energy Information Administration or EIA has predicted that crude oil prices will decline in 2025 and 2026 by an average of 9% on the back of higher output.

According to data received from EIA, the average price of crude oil in 2024 was around $81 a barrel, while in 2025, it would be around $74 and in 2026, it may be around $66 a barrel.

The output of US crude oil during 2024 was 13.2 million barrels per day. In the coming two years, it is expected to be 13.5 million barrels per day and 13.6 million barrels per day, respectively.

Macroeconomic assumptions are a key driver in the EIA's Short-Term Energy Outlook, which is the first to include forecasts for 2026.

EIA assumes the U.S. GDP will grow by 2% in both 2025 and 2026.

Moreover, it expects downward oil price pressures over much of the next two years, as global oil production will grow more than global oil demand.

The unwinding of OPEC+ production cuts and strong growth in oil production outside OPEC+ results in global oil production growing in the forecast.

The EIA expects global production of liquid fuels will increase by 1.8 million barrels per day in 2025 and 1.5 million barrels per day in 2026. Although it forecasts OPEC+ will increase production, it expects the group will produce less crude oil than stated in its most recent production target in an effort to avoid significant inventory builds.

However, the forecast was completed before U.S. imposed additional sanctions targeting Russia’s oil sector, which reduced the export oil products from Russia to global markets. So, the next month's EIA report may see a higher forecast for oil prices.

According to Reuters, the share of U.S. supply coming from the Permian Basin of Texas and New Mexico, the world's largest shale oil-producing region, is expected to continue to grow and account for more than half of all of the country's output in 2026, the report said.

Oil prices rose on Wednesday, trimming losses from the previous day, as the focus turned back to potential supply disruptions from sanctions on Russian tankers, though gains were capped as the market awaited more clarity on their impact.

Brent crude futures edged up 51 cents, or 0.6%, to $80.43 a barrel by 0735 GMT, after dropping 1.4% in the previous session. U.S. West Texas Intermediate crude climbed 64 cents, or 0.8%, to $78.14 a barrel after a 1.6% decline