In a bold prediction for energy markets, JP Morgan has projected that Brent crude could slide into the $30s by the end of FY27, driven by a deepening global supply glut that far outpaces demand growth. The investment bank’s latest outlook suggests that even as oil consumption rises steadily over the next three years, supply additions — particularly from non-OPEC+ producers — will overwhelm the market and weigh heavily on prices. If this plays out, it could prove to be a major boost for Indian markets, given the country’s heavy reliance on oil imports.Global oil demand is expected to expand by 0.9 mbd in 2025, taking total consumption to 105.5 mbd. Growth is projected to hold firm in 2026 and accelerate to 1.2 mbd in 2027. Yet this steady rise is unlikely to keep pace with supply, which JP Morgan estimates will grow at nearly three times the rate of demand in both 2025 and 2026. Although the pace of supply expansion moderates sharply in 2027, it will still far exceed what the market can comfortably absorb.
A major driver of this imbalance is the resurgence of non-OPEC+ production. The bank notes that half of the projected supply gains through 2027 will come from outside the alliance, powered by robust offshore developments and sustained momentum in global shale. Offshore, once viewed as a cyclical and cost-heavy sector, has now transformed into a reliable, low-cost growth engine. It is poised to add 0.5 mbd in 2025, 0.9 mbd in 2026, and another 0.4 mbd in 2027. With nearly all FPSOs through 2029 already sanctioned, JP Morgan highlights that visibility on new offshore barrels is exceptionally strong and future completions are highly assured.
Shale oil remains the most flexible lever in global supply. While US shale growth is slowing, productivity and capital efficiency continue to support output. Beyond the US, Argentina’s Vaca Muerta has emerged as a scalable, low-cost frontier backed by improving export infrastructure. In 2025, global shale supply rose 0.8 mbd, and assuming oil prices hold in the mid-$50 range, shale output is forecast to grow by 0.4 mbd in 2026 and 0.5 mbd in 2027.
These supply surges have led to a significant inventory build. Global observable inventories have grown 1.5 mbd so far this year, with nearly 1 mbd sitting in oil-on-water and Chinese stocks. JP Morgan views this entire increase as an additional layer of supply that will spill into 2026. Without intervention, the surplus could widen to 2.8 mbd in 2026 and 2.7 mbd in 2027.
Such imbalances imply Brent could fall below $60 in 2026 and drop into the low $50s by the final quarter, ending the year with a $4 handle. By 2027, average prices could sink to $42, slipping into the $30s by year-end. While the full magnitude may not materialise, JP Morgan expects rebalancing to come mainly through voluntary and involuntary supply cuts and maintains its Brent forecast of $58 for 2026. At present, Brent is trading just above $60 per barrel.
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