Oil glut expected to grow in 2026 as OPEC revives output, says EIA

(Bloomberg) – Global oil markets will face a widening glut in 2026 as OPEC brings back production and output from the U.S., Canada and Guyana continues to grow, the U.S. government said in its first set of forecasts for next year.

World oil markets are expected to average a surplus of 800,000 barrels a day in 2026, the Energy Information Administration said Tuesday. That’s more than twice as large as the 300,000 bpd surplus the agency projects for this year. The EIA had forecast a small supply deficit this year in last month’s report. 

Driving the glut, output from both inside an outside the cartel is expected to grow this year and next, while consumption from countries in the OECD sees a slight decrease in 2026, the EIA said. Demand from China and India will continue to increase next year, the agency projected.

US oil output is projected to grow more slowly next year as lower prices put a damper on drilling activity and producers prioritize value over volume. Production in the U.S. will increase only 0.6% in 2026, less than a quarter of the 2.5% growth rate projected for this year, the EIA said. US production is estimated to peak in the second quarter of 2026 at 13.67 million barrels a day before decreasing by the end of the year.