Oil prices are projected to drop below an average of $60 per barrel next year, according to the latest forecasts from investment banks and the US Energy Information Administration (EIA).

Brent Crude and West Texas Intermediate (WTI) Crude are both expected to decline from their current levels of $63 and $60 per barrel, respectively, amid emerging oversupply concerns. Analysts warn that rising global inventories will continue to put downward pressure on prices throughout 2026, despite ongoing geopolitical uncertainties.

The EIA’s Short-Term Energy Outlook (STEO) forecasts Brent crude to average $54 per barrel in the first quarter of 2026 and $55 per barrel for the full year. WTI Crude is expected to average $59 per barrel, while Brent is projected to settle at $62.23 per barrel, slightly lower than the $63.15 average predicted in the Reuters October poll.

The EIA noted that its revised projections reflect two key factors: China’s ongoing oil stockpiling, which adds upward pressure on prices, and intensified sanctions on Russia’s oil sector, which could limit production next year.

“China’s strategic purchases will place more upward pressure on prices than previously assumed, while the recent sanctions on Russia could reduce oil output below current forecasts,” the agency said.

While fundamentals point to a bearish market in 2026, geopolitical developments—particularly in Venezuela, Russia, and Iran—are expected to continue influencing oil price movements.