Global oil prices may soon experience a historic drop. Investment bank JP Morgan forecasts that by 2027, Brent crude could fall to $30 per barrel. Oil prices have already decreased by 14% since early 2025, now trading around $62 a barrel. Goldman Sachs analysts predict U.S. crude will average $53 per barrel in 2026.
The main reason for the projected drop is growing oil supply. JP Morgan estimates a surplus of 2.8 million barrels per day in 2026 and 2.7 million in 2027. The International Energy Agency forecasts an even larger surplus—up to 4 million barrels per day in 2026.
China is currently absorbing surplus oil for its strategic reserves, but this buffer is limited. The main new producers are in South America: Argentina, Brazil and Guyana have sharply increased production. Argentina’s Vaca Muerta shale output reached a record 551,000 barrels per day in September 2025, 30% higher than a year earlier. Guyana became the world leader in oil production per capita—900,000 barrels daily, expected to reach 1.7 million by 2030.
Brazil continues expanding deepwater fields, increasing its capacity. Along with growth in Canada, these countries account for 75% of global oil supply increase in 2025.
Even if OPEC+ maintains current voluntary production cuts, a surplus will remain, and restoring production—as planned—would make the glut even larger. Analyst surveys suggest most think OPEC+ is unlikely to cut output next year, so prices will likely keep dropping.
Countries relying on high oil prices for their budgets, such as Nigeria and Russia, may be at risk. For example, Russia’s oil and gas revenues dropped by 35% in November 2025 compared to the previous year. By contrast, importing countries such as India and Ukraine will benefit from cheaper oil, reducing inflation and energy costs.
Analysts expect the oil market to begin rebalancing in 2027, but until then, the world faces two years of oversupply. The current situation is driven by technological progress, the rise of new producers, and structural shifts in demand. Despite some uncertainties, the high-price oil era seems to be ending for at least several years.
