Oil Glut Will Expand in 2026 as OPEC Output Rebounds, EIA Says
Global oil markets are on track to face a significant surplus in 2026, according to the U.S. Energy Information Administration (EIA). OPEC’s decision to ramp up production, combined with steady output growth from countries like the United States, Canada, and Guyana, is driving the projected glut.
In its latest report, released on January 14, 2025, the EIA forecasts an average oil surplus of 800,000 barrels per day in 2026. This figure is more than double the 300,000 barrels per day surplus anticipated for 2025. The updated outlook also marks a shift from last month’s projection of a slight supply deficit in 2025.
Rising Production Amid Slower Demand Growth
The surplus reflects increasing production from both OPEC and non-OPEC countries. Meanwhile, oil consumption among OECD nations is expected to dip slightly in 2026. However, rising demand from China and India will provide a partial offset, as these nations continue to fuel global energy growth.
U.S. Oil Output to Slow Amid Price Pressures
The EIA projects U.S. oil production to grow at a slower pace in 2026. Lower prices are expected to curb drilling activity, with producers focusing on maximizing value rather than increasing output. The report estimates a modest 0.6% production growth in 2026, significantly lower than the 2.5% growth rate projected for 2025.
U.S. production is anticipated to peak in the second quarter of 2026 at 13.67 million barrels per day before tapering off toward the end of the year.
Looking Ahead
As global oil supply outpaces demand in 2026, market dynamics could shift significantly. OPEC’s output rebound and sustained growth in non-OPEC production will challenge market stability, particularly as consumption trends in OECD countries show signs of slowing.
Energy stakeholders must closely monitor these developments as the market navigates a period of surplus. Balancing supply with sustainable demand growth will be key to maintaining global energy market equilibrium.
