Brent's New Reality: How OPEC+'s Supply Surge Drives Barclays to Slash 2025-2026 Forecasts

Barclays has issued a stark revision to its oil price outlook, slashing its 2025 Brent crude forecast to $66 per barrel and its 2026 estimate to $60—a reflection of OPEC+'s aggressive production strategy and the shifting dynamics of global oil markets. The bank’s analysis underscores a pivotal moment for crude prices, as OPEC+ accelerates the unwinding of supply cuts, signaling a strategic pivot toward market share over price stability.

The Supply Surge and Its Impact

OPEC+'s June decision to boost output by 411,000 barrels per day (bpd) marked the second consecutive month of production increases, driven largely by Saudi Arabia’s efforts to discipline underperforming members like Iraq and Kazakhstan. The group now aims to phase out remaining voluntary cuts by October 2025—a full year earlier than previously projected—adding 390,000 bpd to 2025 supply and 230,000 bpd in 2026. This acceleration has loosened Barclays’ global supply-demand balance estimates by 290,000 bpd for 2025 and 110,000 bpd for 2026, creating significant downward pressure on prices.

U.S. Production Declines Compound the Oversupply

Barclays also revised its U.S. oil production forecast, projecting a 100,000 bpd decline from Q4 2024 to Q4 2025, followed by an additional 150,000 bpd drop in 2026. This reversal—from growth to contraction—stems from lower drilling activity and capital discipline among U.S. shale producers, further easing global supply constraints. Combined with OPEC+'s output hikes, these trends create a supply-elastic environment that could suppress prices for years.

Market Reaction and Analyst Consensus

The immediate market response to OPEC+'s June decision was swift: Brent futures fell $2 per barrel, dropping to $59.20 by early trading on Monday. Barclays’ revisions align with broader sentiment: Morgan Stanley cut its 2025 Brent forecast by $5 to $70, while Rystad Energy’s Jorge Leon called the OPEC+ move a “bombshell” risking oversupply. However, some analysts argue the impact may be muted, as the announced increases largely formalize existing overproduction rather than introducing new supply.

Geopolitical and Macroeconomic Crosscurrents

OPEC+'s actions reflect both internal tensions and external pressures. Saudi Arabia’s leadership is pushing noncompliant members to meet quotas, while global economic slowdown fears—exacerbated by U.S. tariff disputes—threaten demand. barclays emphasized that tariff-related uncertainties, particularly in advanced economies, compound the supply-driven price pressures.

Conclusion: A New Era of Lower-for-Longer Oil?

Barclays’ forecasts suggest a prolonged period of lower oil prices, with 2025 and 2026 Brent averages now at $66 and $60, respectively—$6 below pre-2024 estimates. The confluence of OPEC+'s supply acceleration, U.S. production declines, and macroeconomic headwinds creates a compelling case for bearish positioning in oil markets.

Investors should note the 390,000 bpd incremental supply OPEC+ plans to add in 2025 alone—a volume exceeding the entire annual oil production of Ecuador. Meanwhile, U.S. producers’ capital discipline and reduced drilling activity amplify the oversupply risks. While geopolitical flare-ups or demand surprises could temporarily lift prices, Barclays’ analysis points to a structural shift toward a more supply-driven market.

For investors, this signals a need to recalibrate energy portfolios: reduce exposure to price-sensitive equities like oil majors (e.g., ) and prioritize companies with low-cost operations or diversified revenue streams. The era of $100-per-barrel oil may be over—for now.

In this new reality, OPEC+'s strategic shift and the market’s supply elasticity are the dominant forces shaping crude’s trajectory. Investors ignoring these dynamics may find themselves on the wrong side of a prolonged downturn.