Global Energy Markets Shaken as Oil Prices Plunge Ahead of 2026 Supply Glut
London, UK — December 28, 2025
Global Energy Markets Shaken as Oil Prices Plunge Ahead of 2026 Supply Glut as the final trading sessions of 2025 reveal a dramatic shift in the world’s energy landscape.
In the last 24 hours, Brent crude oil prices have dropped by more than 2%, settling at $60.80 per barrel, while U.S. West Texas Intermediate (WTI) has fallen to $56.74.
This downward spiral is driven by a “perfect storm” of rising production from non-OPEC nations—led by the United States, Brazil, and Guyana—and a significant cooling of demand in China.
The International Energy Agency (IEA) has warned that the world is heading toward a record surplus of nearly 3.84 million barrels per day in 2026, a level of oversupply not seen since the height of the 2020 pandemic.
The plunge in prices comes despite efforts by the OPEC+ alliance to stabilize the market. While the cartel recently announced a pause in production hikes for the first quarter of 2026, traders remain bearish due to the “shale surge” in the U.S. and the potential for a peace agreement in Ukraine, which could bring more sanctioned Russian oil back into official global channels.
For oil-dependent economies in the Middle East and Africa, this price collapse represents a significant fiscal challenge as they prepare their 2026 national budgets.
Key Headlines:
• Prices at 5-Year Lows:
Brent crude hits $60, marking a fourth consecutive year of commodity price declines.
• The 2026 Surplus:
IEA and World Bank forecast a massive global oil glut, with supply exceeding demand by nearly 4 million bpd.
• US Production Surge:
U.S. crude output reaches record highs, undermining OPEC+ efforts to control global supply.
• Chinese Demand Cools:
Stagnating industrial growth and a rapid shift toward electric vehicles (EVs) in China have slashed global consumption forecasts.
• Green Energy Impact:
Lower fossil fuel prices threaten to slow the pace of the energy transition by making traditional fuels temporarily more attractive for power generation.
The End of the “High Price” Era?
The current market dynamics suggest that the era of $80+ oil may be over for the foreseeable future.
The U.S. Energy Information Administration (EIA) has revised its 2026 forecast, predicting that Brent will average just $55 per barrel throughout next year.
This is a seismic shift from early 2025, when geopolitical tensions briefly pushed prices toward $90.
The primary driver is “supply diversification,” as long-cycle offshore projects in South America and the continued efficiency of U.S. fracking have created a “wall of oil” that demand can no longer absorb.
Furthermore, the “Electric Vehicle Revolution” is finally having a measurable impact on the bottom line.
The World Bank reports that the rapid adoption of EVs and hybrid technology, particularly in China and the EU, is permanently dampening the growth of oil demand for transportation.
In 2025 alone, EV sales grew by an estimated 25% globally, displacing millions of barrels of refined gasoline.
Geopolitical Fallout and the “Ukraine Factor”
The possibility of a diplomatic breakthrough in the Russia-Ukraine conflict has also played a major role in the recent price drop.
Markets are “pricing in” a de-escalation that could lead to the gradual lifting of Western sanctions on Russian energy exports.
If Russian crude can move freely through European pipelines again, the global surplus would swell even further.
This prospect has left OPEC+ members, particularly Saudi Arabia and the UAE, in a difficult position as they balance their desire for market share against the need for higher prices to fund their domestic diversification projects.
Egypt, as a key transit hub through the Suez Canal, is closely monitoring these developments.
While lower oil prices help reduce the national import bill for refined products, a global slowdown in energy trade could lead to lower transit revenues.
Cairo has been working within the Arab League to coordinate a “regional energy security strategy” that focuses on natural gas and green hydrogen as a hedge against the volatility of the crude oil market.
Secrets and Exclusives:
The “Riyadh-Moscow Split”
Exclusive intelligence obtained by CJ Global from sources within the OPEC+ secretariat suggests a growing rift between Riyadh and Moscow.
While Saudi Arabia is pushing for further voluntary cuts to defend the $60 floor, Russia—facing its own internal economic pressures—is reportedly seeking to increase exports to Asian markets at any price.
This “secret competition” within the cartel is the primary reason why OPEC+ was forced to pause its planned production increases; the unity of the group is at its most fragile point in years.
As we enter 2026, the global energy market is no longer a “seller’s market.” With supply abundant and technology changing the way we move, the power has shifted back to the consumers.
The energy landscape of 2026 will be defined by competition, oversupply, and a painful adjustment for those still clinging to the old oil-dominated order.
