World Bank Forecasts Brent Crude Oil to Average $60 per Barrel Amid Global Supply Surge

The World Bank has projected that Brent crude oil prices will average $60 per barrel in 2026, signalling a potential decline driven by increased global supply and slower demand growth. The forecast, contained in the Bank’s latest Commodity Markets Outlook report, suggests that oil markets are entering a period of relative stability after years of volatility triggered by geopolitical tensions, production cuts, and economic uncertainty.

According to the report, the expected price decline reflects growing output from non-OPEC producers, particularly in the United States, Brazil, and Guyana, as well as a gradual easing of production constraints among OPEC+ member nations. The World Bank said that higher investment in new oil projects and technological advances in shale production are likely to sustain global supply growth through 2026.

“The oil market is shifting toward equilibrium as supply continues to outpace demand recovery in several regions,” the report stated. “We project that Brent crude will average around $60 per barrel in 2026, assuming no major geopolitical disruptions or production shocks.”

The forecast marks a significant shift from the 2024 average price of about $83 per barrel, as reported by international energy agencies. Analysts said the projected decline would offer relief to oil-importing countries battling inflation and high energy costs but could pose fiscal challenges for oil-dependent economies such as Nigeria, Angola, and Saudi Arabia.

The World Bank noted that while global demand for petroleum products remains steady, the pace of growth has slowed due to the acceleration of renewable energy adoption, electric vehicle expansion, and energy efficiency initiatives in major economies. “The ongoing energy transition continues to reshape global consumption patterns,” it stated, adding that demand from advanced economies is expected to plateau by 2026, while Asia will remain the key growth driver.

However, the report warned that risks remain, particularly from geopolitical tensions in the Middle East, potential disruptions in the Red Sea trade route, and policy shifts among major oil producers. It added that volatility could persist if global economic recovery falters or if production cuts are reintroduced to stabilise prices.

In its assessment of developing countries, the World Bank cautioned that lower oil prices might impact fiscal revenues and foreign exchange earnings in oil-exporting nations, urging governments to prioritise economic diversification and strengthen non-oil revenue sources. “Countries dependent on oil exports must accelerate structural reforms to mitigate the impact of lower prices on their budgets and external balances,” the Bank advised.

For Nigeria, where crude oil exports account for over 80 percent of foreign exchange earnings, the projection could have mixed implications. On one hand, a fall in oil prices could reduce government revenue and weaken the naira; on the other, it might ease domestic fuel import costs, particularly as local refining capacity grows with the ongoing expansion of the Dangote Refinery and the planned rehabilitation of state-owned refineries.

Energy economist Dr. Adewale Bankole noted that Nigeria’s fiscal plans must account for the possibility of lower oil prices over the next few years. “The World Bank’s projection is a wake-up call for Nigeria to intensify its diversification drive. The 2026 federal budget should not be over-reliant on optimistic oil benchmarks,” he said.

He added that the expansion of local refining capacity could help Nigeria mitigate external shocks by reducing dependence on imported petroleum products. “If Nigeria can process its crude domestically and export refined products, the effect of lower global crude prices may be less severe,” Bankole explained.

The World Bank also observed that the broader commodity market faces similar headwinds, with metal and agricultural prices expected to stabilise or slightly decline in 2026. It attributed this trend to improved production, reduced supply chain disruptions, and subdued demand growth from major economies such as China.

In a related comment, the Chief Economist for the World Bank Group, Indermit Gill, said the world economy is transitioning to a new phase of price normalisation after years of pandemic-related and geopolitical shocks. “The post-pandemic commodity boom is easing. As global growth moderates and supply improves, prices across energy, metals, and food commodities are likely to stabilise at lower levels,” he said.

Despite the projected moderation in oil prices, the Bank emphasised that energy markets would remain influenced by climate policy shifts and green transition investments. It urged oil-dependent economies to invest in renewable energy, infrastructure, and human capital development to build long-term resilience.

“The future of global energy is changing rapidly. Countries that act decisively to diversify their revenue base and embrace low-carbon solutions will be better positioned for sustainable growth,” the report concluded.

Meanwhile, market analysts believe that Brent’s projected average of $60 per barrel could test OPEC+’s resolve to maintain supply discipline. Some experts argue that extended price weakness might prompt the cartel to consider new production cuts to prevent a deeper slide in revenues.

Oil traders have responded cautiously to the forecast, with futures markets reflecting moderate bearish sentiment. As of the last trading week, Brent crude hovered around $68 per barrel, slightly above the World Bank’s long-term projection but well below its mid-2024 highs.

The International Energy Agency (IEA) also echoed similar sentiments, predicting that oil demand growth will slow to less than one million barrels per day by 2026 as cleaner energy alternatives gain momentum. The convergence of these projections from global institutions underscores the structural shift currently unfolding in the energy market.

With Brent crude prices expected to remain subdued over the next few years, the World Bank’s outlook serves as a critical signal for policymakers, investors, and oil producers to recalibrate strategies for a future defined by greater supply, slower demand, and an accelerating energy transition.