Oil Under Pressure, Gas Supply Growth, and the 2026 Outlook

Key takeaways:

• Crude oil is likely to stay under pressure in the first half of next year because the market is well supplied, with supply growth still outpacing demand.

• The main upside risk for oil remains geopolitics, with disruptions or escalations in Russia, Iran, or Venezuela able to add a risk premium even if fundamentals are soft.

• US LNG export growth is bringing more natural gas to global markets, which could keep gas prices weaker into the summer unless demand surprises on the upside.

• Electricity prices will be driven by regional dynamics, but the direction could be upward if data centre buildout and AI related load keep accelerating.

• Carbon prices may firm further if policymakers keep climate objectives front and centre, since tighter carbon constraints typically translate into higher allowance prices.

• A market that is “over supplied” can still turn quickly, and when the supply overhang becomes consensus, it often sets the stage for a reaction, either via OPEC action or an unexpected disruption.

• Russia remains a wildcard because sanctions enforcement is less predictable than before, so outcomes range from more pressure on prices if exports flow freely to a higher risk premium if sanctions tighten.

• Venezuela is not only a supply story but a refining story, because its heavy, sour crude fits specific Gulf of Mexico refineries, and changes in access to those barrels can reshape product balances.

• OPEC is balancing market share and revenue, and it may accept lower prices for longer to protect volumes while watching how non OPEC supply and demand evolve.

• Any shift back to production restraint is unlikely to be triggered by a single number, but sustained prices around the mid 50s combined with the Russia, Iran, and Venezuela outlook could accelerate a policy pivot.