By Panos Mourdoukoutas
Rising global inventories weighed on oil markets in 2025, crushing prices and helping push headline inflation lower. Some forecasters expect the trend to extend into 2026, although views diverge on how prices will evolve amid geopolitical and supply uncertainties.
Inventory Buildup
According to a recent International Energy Agency (IEA) Oil Market Report, global observed oil inventories climbed to four-year highs in October, reaching 8,030 million barrels. Stockpiles averaged 1.2 million barrels per day during the first 10 months of the year.
The buildup reflects a shift in the balance between oil supply and demand. Global liquids demand remained relatively stable, as weaker demand from China was offset by stronger consumption in the United States.
At the same time, global supply expanded due to steady output from Saudi Arabia, increased production from Nigeria and other OPEC-9 members, and rising supply from non-OPEC producers, such as Canada, Guyana, Kazakhstan, and U.S. shale operators.
OPEC-9 is a subset of the 22-member OPEC+ that are subject to, and presumably adhere to, Organization of the Petroleum Exporting Countries (OPEC) production targets and are included in widely reported oil market statistics from the IEA.
Production shortfalls in Iran, Libya, and Venezuela partially offset these supply gains.
Yearlong Price Drop
The growing inventory overhang weighed heavily on prices throughout the year. West Texas Intermediate (WTI) crude fell from about $72 per barrel at the beginning of the year to roughly $58 by the end of December.
Brent crude followed a similar trajectory, declining from around $74 per barrel in January to approximately $62 by December.
Lower oil prices contributed to a slowdown in headline inflation in the United States, with the consumer price index falling from 3 percent at the beginning of the year to 2.7 percent by year’s end.
Despite the apparent surplus, the IEA noted a disconnect between the global oil glut and inventories near decade lows at key pricing hubs.
“Despite record volumes of oil piling up on water, benchmark crude oil prices eased only marginally in November, with North Sea Dated last trading at around $63 [per barrel] and WTI at $59 per barrel,” the IEA said.
The agency noted that lower expected future prices have reduced the incentive to store oil for later sale. Trends in the supply and demand balance, measured in million barrels per day, have also been affecting prices.
Athens-based oil forecaster Kosmas Megaloeconomou expects prices to stabilize in 2026 following continued volatility in 2025, with prices trending higher through much of the coming year.
Using a seasonal pricing model, he estimates the average annual oil price for 2026 at $63.75, down slightly from $64.78 in 2025—a 1.6 percent decline. He projects the average price for December 2026 at $65.33, representing a 12.9 percent increase from the December 2025 average of $57.85.
“The year 2026 seems to be a year of stabilization for crude oil prices,” Megaloeconomou told The Epoch Times. “The decline in average crude oil prices is expected to end after a long period of decline that began in June 2022, and the average price in 2026 will finally be at the same levels as in 2025.”
Iván Marchena, senior economist at global brokerage Just2Trade, also expects oil prices to remain within a relatively stable range rather than surge sharply.
However, he said outcomes will depend heavily on developments in the war in Ukraine and whether U.S. President Donald Trump pursues military action against Venezuela.
“These events can either tank or skyrocket the prices,” he told The Epoch Times.
By contrast, the U.S. Energy Information Administration (EIA) expects further price declines in 2026, citing continued inventory growth. The agency forecasts Brent crude prices will average $55 per barrel in the first quarter of 2026 and remain near that level for the rest of the year.
Another sign pointing to lower prices is Saudi Aramco’s plan to reduce its official selling prices for February-loading cargoes to Asia by up to 30 cents per barrel, extending price cuts even after crude prices fell to a five-year low last month.
Diverging Fortunes
Hugh Dixon, marketing manager at PSS International Removals, also expects the supply-demand imbalance that pressured prices in 2025 to persist into 2026.
“I anticipate a slight decrease in U.S. oil production to 13.5 million barrels per day and an increase in U.S. natural gas production to 109 billion cubic feet per day,” Dixon told The Epoch Times.
He said liquefied natural gas exporters, including Cheniere Energy, were among the biggest beneficiaries of market conditions, alongside natural gas producers serving rising Asian demand and data centers requiring large amounts of power. Dixon also pointed to gains in nuclear and infrastructure sectors tied to expanded transmission networks.
By contrast, Dixon said large integrated oil companies, such as ExxonMobil and Chevron, struggled due to lower refining margins and excess supply. He cited reduced employee bonuses at Chevron and promotions at Cheniere Energy as examples of diverging fortunes within the energy sector.
Ido Ben Aroya, founder and CEO of FreightAlert AI, said companies with real-time visibility into energy supply chains fared better than those relying on static planning models.
“In 2025, the biggest winners were companies with real-time visibility and contingency routing, while the biggest losers were those still relying on static planning amid port congestion, geopolitical risk, sanctions, and weather-driven disruptions,” Ben Aroya told The Epoch Times.
Looking ahead to 2026, he expects greater volatility in energy logistics driven by geopolitical tensions and regulatory shifts, increased reliance on risk intelligence driven by artificial intelligence, and a growing focus on supply chain resilience rather than pure cost optimization.
