Global Oil Supply Improves, Paving Way for Price Drop by 2027

Supply dynamics in the crude oil market are set to shift dramatically over the next three years. Restored output from the Middle East, combined with higher non‑Gulf production, is expected to narrow the supply gap that has supported higher prices. By the end of 2025, Gulf exports were already near their 2023 average, and the trend is projected to continue.

The shift comes as refined product availability rises and becomes more affordable, which should gradually revive demand. However, the short‑term outlook remains tight, with physical Brent pricing exceeding $130 a barrel and benchmark futures hovering above $100.

Analysts forecast that the fourth quarter of 2026 will see the global oil market move into surplus, a condition likely to persist through 2027. This surplus, coupled with a $25 per barrel risk premium built into current prices, suggests that the market could comfortably settle at around $80 a barrel by 2027.