Global oil prices, already under pressure from oversupply, could face an even steeper drop next year, posing economic challenges for oil-reliant nations like Nigeria.
The International Energy Agency (IEA) projects that oil inventories will grow by 2.96 million barrels per day in 2026, surpassing the average glut seen during the COVID-19 lockdowns of 2020. Demand growth is expected to be less than half the pace recorded in 2023, while production continues to rise.
OPEC+, led by Saudi Arabia, has been ramping up previously halted production, and output from non-OPEC nations, particularly in the Americas, is also expanding. The IEA noted, “Oil-market balances look ever more bloated as forecast supply far eclipses demand towards year-end and in 2026.”
Crude prices have fallen about 12% this year, hovering near $66 per barrel in London. While this offers some relief to consumers, it threatens the revenues of oil producers. The decline comes amid worries that U.S. President Donald Trump’s trade policies could further slow global economic growth.
Despite strong summer fuel demand, the IEA says markets are already tipping into surplus, with global oil stockpiles hitting a 46-month high in June. New geopolitical tensions, such as sanctions on Russia or Iran, could still alter the supply-demand balance.
The agency also forecasts that global oil demand will plateau before 2030 as the shift to electric vehicles accelerates. For now, it expects consumption to grow by just 680,000 barrels per day in 2025 and 700,000 in 2026, while supply from the U.S., Guyana, Canada, and Brazil continues to climb.
OPEC+ is yet to decide whether it will keep boosting output, pause, or reverse recent increases as it seeks to defend market share against rising competition.
