Bruegel sees oil market imbalance lasting until 2027
This digest was compiled by AI from multiple sources — links to the originals are below.
Analysts at European research center Bruegel project the global oil market will remain unbalanced until at least 2027. The forecast points to sustained oversupply and weak demand as key factors.
The Forecast
Bruegel, a Brussels-based think tank, released a report stating that global oil markets will not rebalance before 2027. The analysis cites persistent oversupply from major producers and slower-than-expected demand growth, particularly from China. The forecast contradicts more optimistic outlooks from OPEC and the International Energy Agency.
Market Implications
The prolonged imbalance could keep oil prices under pressure, affecting revenues for major exporters like Kazakhstan. Bruegel estimates that Brent crude may average below $60 per barrel through 2026. Lower prices would strain budgets of oil-dependent economies and could slow investment in new production capacity.
Geopolitical Risk from Iran
The killing of Qassem Soleimani by a U.S. airstrike has heightened geopolitical tensions, with Iran vowing retaliation. This development introduces a risk factor for global oil markets, as any disruption in the Strait of Hormuz could affect supply. The Bruegel report's forecast of prolonged oversupply may be challenged by potential supply shocks from the region.
What's Next
OPEC+ is scheduled to meet in July to discuss production quotas. It remains unclear whether the group will adjust output targets in response to Bruegel's bearish forecast.
2 sources
Bruegel sees oil market imbalance lasting until 2027
