Outlook for the 2026 Crude Oil Market (1)-- Focus on OPEC plus Moves and Geopolitical Risks

How should we view the year 2026? This article summarizes views from six analysts at financial institutions and think tanks, along with perspectives from independent analysts and other experts.

Several analysts highlighted the following key factors:
・OPEC plus developments,
・Geopolitical risks involving the Middle East, Russia, and Ukraine
・Energy policies under the Trump administration.

There is broad agreement that volatility in the 2026 crude oil market will remain extremely high.
The forecast ranges for the 2026 crude oil market from the six analysts were as follows:
WTI crude futures at $35-90, and Brent crude futures at $40-94.

Takeshi Ueno, Chief Economist at NLI Research Institute, expects downward pressure on prices from the previous OPEC plus rollback of production cuts, with supply/demand loosening likely to weigh on prices toward spring. Although prices might recover slightly after summer due to seasonal demand and reduced US shale output resulting from weak price levels, he commented, "The renewed reduction of production cuts by OPEC Plus could cap the upside."

He highlighted three points of particular interest:
1.When and at what pace OPEC Plus conducts a reduction in production cuts
2.Whether peace is achieved between Russia and Ukraine, and if so, whether sanctions on Russia are eased
3.The performance of AI-related stocks and investments--if they stall, it could weigh on crude prices through impacts on the economy and investor sentiment

Naohiro Niimura, Co-CEO, Market Risk Advisory, has main scenario that Brent crude prices would fall to below $60 and then rising toward around $65 toward year-end, with a core range of $55-65.

He states that:
・If OPEC Plus production increases proceed as expected, prices could fall significantly.
・If Trump strengthens tax cuts or if OPEC Plus is unable to increase production, reduced supply and economic overheating could push prices higher.

He also questioned whether the FOMC would limit itself to modest interest rate cuts as expected. For Japan, he warned that reflationary policies under a newly formed Takaichi administration could cause significant volatility in yen-based crude prices, adding that "Close attention must be paid to Japan's policy direction."

Tomomichi Akuta, Senior Economist at Mitsubishi UFJ Research and Consulting, expects geopolitical risks to continue driving the market in 2026. Although tensions have eased compared to earlier periods, he stated, "Geopolitical risks remain smoldering in Ukraine, the Middle East, and Venezuela. While US-China tensions have eased somewhat compared to before, the outlook remains uncertain." He added that while both US and Chinese economies are expected to slow down, they should remain resilient, and OPEC Plus is likely to show renewed willingness to increase production from spring onward.

Yuki Takashima, Economist at Nomura Securities, forecasts WTI crude oil to trade within a $50-70 range in 2026, with the key question being whether prices break below the $55 lows seen in April-May 2025. Since the cessation of OPEC Plus production increases in January-March is explained as seasonal, he expects production hikes to resume in April, stating "There is a possibility WTI could fall into the low $50's range during the first half of the year."

However, with US shale's breakeven price around $60, production growth would stagnate if prices fall below that level, tightening supply. Thus, "WTI is unlikely to remain stably below $60, " said Mr Takashima.

He also warned that, if the Trump administration implements subsidies or tax cuts for oil companies to lower energy prices, this could effectively lower breakeven levels and accelerate crude price declines.

Takayuki Nogami, Chief Economist at Japan Organization for Metals and Energy Security (JOGMEC), forecasts WTI at $60-70 and Brent at $65-75. He warns that if crude prices rise too high, US consumers may become dissatisfied, hurting President Trump's approval ratings. In such a scenario, "President Trump may strengthen pressure on OPEC Plus members to increase production in order to keep crude prices in check," said Mr Nogami.

Conversely, if crude prices fall too low, dissatisfaction from the U.S. oil industry might also damage his approval ratings, prompting Trump to pressure monetary authorities for rate cuts to support crude prices. Nogami believes crude prices will be trapped between upward and downward pressures, making sustained trends difficult.

He also listed key factors to watch in 2026
1.The state of conflict between Ukraine and Russia
2.Conditions in the Middle East
3.Conditions in South America
4.The selection of Federal Reserve Chair Powell's successor and US monetary policy direction
5.Tariff developments between the US and trading partners including China
6.OPEC Plus production decisions, especially by Saudi Arabia and Russia
7.Whether US shale output increases despite low crude prices thanks to operational improvements
8.The US midterm election results and President Trump's response