EIA forecasts lower oil prices in 2026 and 2027 due to persistent stock builds
What happened
The US Energy Information Administration (EIA) forecasts that production of petroleum and other liquids will continue to exceed global demand, which results in Brent crude oil prices falling from an average of US$69/bbl in 2025 to US$58/bbl in 2026 and US$53/bbl in 2027. Persistently high implied global oil inventory builds in the near-term are putting downward pressure on crude oil prices despite heightened uncertainty around the volume of crude oil exports from Russia and Venezuela. This matters for Projects (EPC/EPCM & Construction) because fresh price movement and input-cost detail should reset bid assumptions, lstk vs reimbursable choice, and negotiation guardrails with 69, 2025, 58 as the clearest commercial anchors; expect bid selectivity
Buyer takeaway
For Projects (EPC/EPCM & Construction), treat this as a cost-boundary signal rather than just a headline; buyer assumptions may need refreshing before the next quote or award decision
Cost / money
Use this to refresh should-cost views and challenge any fast repricing. Keep the read-through directional unless the source itself provides hard commercial numbers
Supplier / commercial
Suppliers with fresh cost justification may push harder on reopeners, indexation, shorter quote validity, or pass-through language. Buyers should separate real drivers from negotiation posture
Safety / operations
The operational risk is indirect: tight budgets or repricing battles often reappear later as reduced slack, substitutions, or execution compromises that buyers then have to manage
What to watch
Watch for shorter quote validity, reopeners, pass-through requests, or attempts to reset pricing on the back of weak evidence
Key facts
- The US Energy Information Administration (EIA) forecasts that production of petroleum and oth
- Persistently high implied global oil inventory builds in the near-term are putting downward p
- This production growth, combined with slower growth in global petroleum demand, has gradually
- China’s strategic stockpile and trends in floating storage have increased non-OECD inventorie
Source excerpts
As a result of obscured crude oil trade and increased oil flows towards less observable non-OECD inventories, as well as China’s demand for strategic stock builds, major global benchmark crude oil prices like Brent have not fallen as much as our implied inventory growth in the STEO would otherwise suggest. OECD commercial stocks are also increasing Although much of the crude oil inventory builds are going to China and other markets that are harder to observe, stocks are also increasing in OECD nations, which c
As OECD commercial storage options begin to fill, the higher marginal cost of storage should prompt market participants to seek other, more expensive options for storing crude oil, which would result in lower crude oil prices and slower global oil production growth over the STEO forecast
Persistently high implied global oil inventory builds in the near-term are putting downward pressure on crude oil prices despite heightened uncertainty around the volume of crude oil exports from Russia and Venezuela