The global oil market ended 2025 with a significant drop in prices: Brent crude oil prices decreased by nearly 18% over the year, marking the worst performance since 2020. This prolonged series of declines has been recorded for the third consecutive year, setting a record for the oil market.
This is reported by Finway
Factors Influencing Price Decline
Experts cite the main reasons for the drop in oil prices as an oversupply, trade disputes between countries, and the impact of geopolitical events. According to analysts, the supply of oil worldwide significantly exceeds demand, putting pressure on prices.
At the beginning of December, the March futures contract for Brent fell by 5 cents, reaching $61.28 per barrel. American WTI crude was trading around $57.92 per barrel, which also corresponds to an annual decline of 19%. According to LSEG data, the average prices for both major benchmarks in 2025 were the lowest in the last five years.
Analysts’ Forecasts on Market Dynamics
Experts believe that in 2026, the oil market will continue to be influenced by oversupply. In particular, BNP Paribas analyst Jason Yin expects that in the first quarter of next year, the price of Brent could drop to $55 per barrel, and throughout the year, it may stabilize around $60 per barrel if supply remains high and demand low.
“The reason we are more pessimistic than the market in the near term is that we believe U.S. shale producers have been able to hedge at high levels,” the analyst explained.
The International Energy Agency estimates that in 2026, the oversupply of oil will reach 3.84 million barrels per day, while Goldman Sachs analysts predict an excess of 2 million barrels daily. Most experts agree that the global oil market will remain oversaturated next year, which could further impact price dynamics.