The global oversupply is set to override geopolitical flare-ups this year, keeping oil prices close to the $60 per barrel mark, the monthly Reuters poll showed on Friday.
Brent Crude prices are expected to average $62.02 per barrel in 2026, according to 31 economists and analysts surveyed by Reuters in January. This month’s estimate for the average Brent price this year is higher compared to the December forecast of $61.27.
The analysts in the poll expect the U.S. benchmark, WTI Crude, to average $58.72 per barrel in 2026, slightly above the December forecast in the poll of $58.15 a barrel.
Early on Friday, both benchmarks were trading above these projections. Brent was at $70.50, and WTI traded above the $65 per barrel mark, at $65.17.
Prices jumped this week amid renewed tensions and rhetoric between the United States and Iran, after U.S. President Donald Trump warned Iran that a “massive armada” of U.S. Navy ships is headed to the Persian Gulf.
“It is a larger fleet, headed by the great Aircraft Carrier Abraham Lincoln, than that sent to Venezuela. Like with Venezuela, it is, ready, willing, and able to rapidly fulfill its mission, with speed and violence, if necessary,” President Trump posted.
Iran, for its part, said that its army is ready to “immediately and powerfully” respond to any aggression.
Despite the most recent flare-up, analysts see the expected oil oversupply as offsetting geopolitical tensions, according to the Reuters poll in January.
“Geopolitics brings lots of noise but neither the events in Venezuela nor Iran should ultimately alter the big picture. The oil market appears to be in a lasting surplus,” Norbert Ruecker, head of economics and next generation research at Julius Baer, told Reuters.
Oil demand trends, especially in China, as well as the OPEC+ supply policies and the U.S. trade policies will be key to oil prices this year, analysts in the poll noted.
By Charles Kennedy for Oilprice.com
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