Brent crude prices are on track for a sharp decline in the coming months, with the U.S. Energy Information Administration (EIA) now forecasting prices to fall from $71 per barrel in July to an average of $58 in the fourth quarter of 2025—and to slip toward $50 in early 2026. The August Short-Term Energy Outlook pins the drop on aggressive OPEC+ supply growth, which is expected to drive global inventory builds above 2 million barrels per day in late 2025 and early 2026—nearly 800,000 bpd more than last month’s forecast.
Historically, sustained builds of this magnitude have put heavy downward pressure on prices, as seen in the 2014–2016 and 2020 downturns. This time, the EIA expects low prices in early 2026 will prompt both OPEC+ and some non-OPEC producers to rein in output, easing the glut later in the year. Even so, the agency has slashed its 2026 Brent forecast to $51, down from $58 just a month ago.
In the U.S., oil production remains on a record-setting trajectory—for now. Increased well productivity is projected to push output to an all-time high near 13.6 million barrels per day in December 2025. But with prices falling, operators are likely to accelerate the slowdown in drilling and completions that’s been underway for much of this year. The EIA now sees U.S. production averaging 13.4 million bpd in 2025 before easing to 13.3 million bpd in 2026. Unlike past bust cycles, shale producers—burned by years of overexpansion—are expected to respond faster and more conservatively, prioritizing shareholder returns over volume growth.
OPEC+’s planned ramp-up comes against a backdrop of shifting alliances and uneasy compliance. Gulf producers, particularly Saudi Arabia and the UAE, are leading the push to reclaim market share, while Russia—still under Western sanctions—is eager to monetize barrels before further restrictions bite. Layer in an uncertain global economy and volatile trade policy, and the risk is that prices undershoot even the EIA’s bearish outlook before supply discipline re-emerges.
If the forecast holds, 2025 will mark a rare convergence: record U.S. production alongside rapidly falling prices. For consumers, the upside is lower pump prices, with retail gasoline projected to average under $2.90 per gallon next year. For producers, the challenge will be managing capital discipline in a market suddenly long on barrels and short on pricing power.
By Julianne Geiger for Oilprice.com
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