Brazil reduces 2026 average oil price estimate to $79.16/barrel

Global oil markets remain in a state of flux as geopolitical tensions and shifting supply dynamics influence price forecasts. Brazil, a key player in non-OPEC+ crude production, has revised its 2026 average oil price estimate to $79.16 per barrel, reflecting evolving market conditions and production trends. This adjustment comes amid a broader context of global supply growth, particularly from non-OPEC+ countries, and ongoing disruptions in key export corridors such as the Strait of Hormuz.

According to the International Energy Agency (IEA), global oil supply is projected to decline by 3.9 mb/d in 2026, averaging 102.2 mb/d, due to prolonged disruptions in the Middle East. Meanwhile, non-OPEC+ producers, including Brazil, Guyana, and Argentina, have contributed significantly to global supply growth, with increase production by 0.2 mb/d in 2026 to an average of 4.0 mb/d. This growth is driven by the deployment of new Floating Production Storage and Offloading (FPSO) vessels in offshore deepwater fields, such as the Buzios field operated by Petrobras.

Despite these supply-side developments, global oil demand is expected to contract by 420 kb/d in 2026, with the second quarter witnessing a sharper decline of 2.45 mb/d. The petrochemical and aviation sectors are particularly affected, with higher prices and demand-saving measures further dampening consumption. J.P. Morgan Global Research anticipates that these fundamentals will keep Brent crude prices around $60/bbl in 2026, citing persistent global supply surplus and the likelihood of voluntary or involuntary production cuts to stabilize the market.

Brazil’s revised price estimate reflects a balance between these supply and demand dynamics and the country’s own production trajectory. While Brazil’s output is expected to rise, the broader market environment—characterized by geopolitical uncertainties and a surplus—suggests that prices will remain under pressure. The interplay of these factors underscores the complexity of forecasting oil prices in a market shaped by both economic fundamentals and geopolitical risks.