Global oil markets
Global oil prices
The Brent crude oil spot price averaged $67 per barrel (b) in January, $4/b higher than the average in December. Daily Brent crude oil prices increased from an average of $62/b on January 2 to $72/b on January 30. Crude oil prices rose in response to disruptions to crude oil production in the United States and Kazakhstan. Despite the near-term increase in prices and short-term disruptions to oil supply, we forecast that strong growth in global oil production will result in high global oil inventory builds over the forecast, causing crude oil prices to fall. We forecast that Brent spot prices will average $58/b in 2026 and $53/b in 2027, down from an average of $69/b in 2025.
Markets also responded to questions over recent U.S. policy action toward Iran, with oil prices recently trading higher and with greater volatility. Crude oil production in Iran has remained stable so far. We assume it will remain stable over our forecast, but acknowledge that actions targeting oil infrastructure or a conflict that affects flows through Strait of Hormuz could obviously reduce Middle East oil production and exports.
Unplanned disruptions to crude oil production in the United States and Kazakhstan tightened near-term oil supplies in January and caused crude oil prices to rise. Disruptions to crude oil production in the United States were driven by cold weather, which we estimate reduced output by 320,000 barrels per day (b/d) in January. In Kazakhstan, power outages at the major Tengiz oilfield, along with a drone attack and severe weather at the producer’s primary export terminal in Novorossiyk, Russia, together reduced oil production by more than 400,000 b/d in January. Total unplanned disruptions increased for the second consecutive month in January, approaching 3.0 million b/d, which is the most since September 2024. Additionally, cold weather across the northern hemisphere in January increased oil demand at the same time these production disruptions occurred, adding to upward oil price pressures.
Despite near-term tightness from disruptions, we assess that strong global oil production growth will continue to outpace oil consumption over our forecast, driving our assessment that global oil inventories will increase. We expect this trend to continue in both 2026 and 2027. We forecast that global oil inventory builds will average 3.1 million b/d in 2026, compared with an average build of 2.7 million b/d in 2025, before decreasing to average of 2.7 million b/d in 2027.
Although we expect prices to fall in 2026 and remain under $60/b in 2027, we assess that both OPEC+ policy and China’s continued strategic inventory builds will limit declines. A large portion of oil inventory builds last year were in strategic stockpiles in China, which limited downward price pressures because these builds acted as a source of demand. We assume that China will continue building strategic stockpiles at nearly the same rate of about 1.0 million b/d in 2026, before reducing strategic builds in 2027.
On February 1, OPEC+ reaffirmed plans to keep production flat in the first quarter of 2026 (1Q26). Despite no plans to announce 2027 targets until 4Q26, we do not expect OPEC+ will increase production next year given our expectation of large inventory builds over the forecast period. Of the nine OPEC members subject to production targets (a group that excludes Iran, Libya, and Venezuela), we expect production will track closely with stated targets during 2026.
Lastly, the evolving situation in Venezuela remains a key uncertainty in our forecast. The oil blockade and the interception of sanctioned oil tankers near Venezuela halted a large portion of Venezuela’s oil exports in December, shutting in production. Reports show that exports recovered in January after licenses were granted to trading companies Vitol and Trafigura to transport Venezuela’s oil. Much of the oil transported by the companies, previously bound for China, went to storage terminals around the Caribbean. The ultimate destination is likely refineries on the U.S. Gulf Coast.
More recently, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) expanded the general license to allow for more companies to transport and sell Venezuela’s crude oil while the sanctions remain in place. As a result, we now estimate that these new shipments will alleviate production shut-ins and will allow Venezuela’s oil production to return to pre-blockade activity by 2Q26. Any further ease of sanctions or changes to U.S. government policy related to Venezuela could result in more oil production than we assumed in this forecast and put additional downward pressure on oil prices.
Global oil production and consumption
Global liquid fuels consumption increased by an estimated 1.1 million b/d in 2025, and we forecast it will increase by 1.2 million b/d this year and by 1.3 million b/d in 2027. Global liquid fuels consumption growth is driven almost entirely by non-OECD countries, which together grow by 1.1 million b/d in 2026 and 1.2 million b/d in 2027. We expect OECD consumption to grow slightly through 2027.
Most non-OECD growth is concentrated in Asia. We forecast total liquid fuels consumption in China increases by 0.2 million b/d in both 2026 and 2027. We expect India will increase its liquid fuels consumption by 0.3 million b/d in both forecast years.
Global liquid fuels production growth increased by an estimated 3.0 million b/d in 2025, and we expect that growth will slow to an average of 1.6 million b/d in 2026 and 0.9 million b/d in 2027. Global liquid fuels production growth in 2026 is driven by strong growth outside of OPEC+, primarily from countries in South America, along with higher crude oil production from OPEC+ members. Global liquid fuels production growth is driven mostly by countries outside of OPEC+ in 2027 as we assume OPEC+ targets will remain at 2026 levels and the group’s production will increase only slightly next year.
