Based on analyses from multiple institutions including the International Energy Agency (IEA), U.S. Energy Information Administration (EIA), Goldman Sachs, and Kpler, the global energy market in 2026 will exhibit multidimensional restructuring: Oil demand growth is highly likely to plateau. The strategic balancing act between OPEC+ production adjustments and the sustained capacity expansion of non-OPEC+ producers may intensify supply pressures, pushing the market into a rebalancing cycle characterized by inventory accumulation and price compression. The natural gas market is expected to witness a surge in liquefied natural gas (LNG) supply led by North America and the Middle East. A mismatch in supply and demand growth rates may create a structurally loose market, with gas prices trending downward. Energy transition will enter a “deep-water zone,” where the greening of power systems will drive industrial transformation, prompting traditional oil and gas companies to accelerate exploration of more pragmatic and rational transition paths.

Dual Pressure from Supply and Demand Weighs on Oil Prices

In 2026, the global oil market is projected to enter a core adjustment cycle centered on supply-demand rebalancing, driven by accelerated supply growth and sluggish demand expansion. Inventory accumulation and price pressure will become the primary market characteristics.

On the demand side, insufficient momentum in global economic recovery will be the primary factor restraining oil demand growth. The IEA's recent monthly report forecasts global crude oil demand at 104.8 million barrels per day in 2026, representing a modest 0.8% year-on-year increase. Regionally, demand in developed economies has entered a structural decline phase. Japan's crude oil consumption remains at multi-decade lows; The United States, as the world's largest crude oil consumer, will also see demand growth stall, with overall consumption expected to remain largely unchanged from 2025 levels. Oil demand among emerging economies shows significant divergence, with incremental demand primarily originating from non-OECD countries, particularly in Asia, the Middle East, and Africa. OPEC's latest monthly report indicates China is poised to remain the engine of oil demand growth in the Asia-Pacific region. However, demand growth in countries like India and Brazil is weaker than anticipated.

Persistent oversupply pressures may become the key variable shaping market dynamics. Global oil supply growth in 2026 will be primarily driven by non-“OPEC+” producers. The IEA's November report projected that non-“OPEC+” producers will contribute an additional 1.2 million barrels per day (bpd) of output by 2026. The EIA also indicated that Brazil, Guyana, and Argentina will be the primary drivers of non-“OPEC+” oil supply growth in 2026, accounting for half of the projected increase. The EIA projects Brazil's daily output will increase by 200,000 barrels to reach 4 million barrels in 2026. Notably, enhanced production efficiency and declining cost curves in U.S. shale oil production ensure its resilience even under low oil price conditions, providing stable support to the supply side.

Under the influence of multiple factors, most institutions believe that the central operating point for international oil prices will shift significantly downward by 2026. Goldman Sachs projects the 2026 annual average price for Brent crude at $56 per barrel and WTI crude at $52 per barrel. JPMorgan maintains a similarly cautious outlook, forecasting Brent crude averages of $57–58 per barrel for both 2026 and 2027.

Natural Gas Supply Surge Shifts Market to Buyer-Dominated

In 2026, a wave of LNG supply led by North America and the Middle East will become the core force reshaping the natural gas market landscape. While demand growth remains resilient, supply growth is expected to significantly outpace demand growth, accelerating the market's shift from a seller's market to a buyer's market.

The IEA report forecasts that global LNG supply growth will reach 7% in 2026, potentially hitting its highest level since 2019. Analytics firm Kpler also indicates that global LNG supply will reach 475 million tons in 2026, a 10.2% increase from 2025. As the world's largest LNG exporter, the United States will be the primary driver of this supply growth. Kpler forecasts U.S. LNG production capacity to rise from 110 million tons in 2025 to 130 million tons in 2026. Additionally, Qatar's production expansion plans will be a significant driver. IEA Executive Director Fatih Birol recently stated at the Singapore International Energy Week that the United States, Canada, Australia, and Qatar will release unprecedented LNG capacity by 2026.

Meanwhile, natural gas demand is also projected to grow further in 2026. The IEA forecasts that global natural gas consumption growth will accelerate to around 2% in 2026. However, demand growth will exhibit pronounced regional divergence. The Asia-Pacific region will lead demand expansion. The IEA anticipates that natural gas demand in the Asia-Pacific region will grow by over 4% in 2026, driven primarily by industrial and urban gas development in China and certain Southeast Asian countries. In contrast, natural gas demand in Europe is projected to decline by 2%, while demand growth in North America will also slow to below 1%.

Overall, natural gas supply growth will significantly outpace demand growth. Multiple institutions anticipate downward pressure on global natural gas prices by 2026, particularly for LNG in the Eurasian market. Goldman Sachs projects that the Dutch Title Transfer Facility (TTF) natural gas futures price—the European benchmark—will decline by nearly 35% by mid-2027. S&P Global Commodities forecasts that the Northeast Asia LNG spot landed price (JKM), a key benchmark for the Asian market, will average $8.8 per million British thermal units (MMBtu) in summer 2026—a significant decline from the 2025–2026 winter period.

However, this does not imply a sustained downward trajectory for natural gas prices throughout 2026. Risks of regional supply tightness and short-term price volatility remain. For instance, the Henry Hub (HH) price in the U.S. may remain relatively robust, supported by strong LNG export demand. The TTF price in Europe remains highly sensitive to inventory levels and sudden supply disruptions. While the JKM price in Asia is correlated with oil prices, it may still experience temporary spikes independent of oil prices during periods of regional supply-demand tightness.

Energy Transition Advances Deeply, Diverse Coexistence Pattern Emerges Clearly

By 2026, the core characteristics of the global energy transition can be summarized as: the electrification of power systems leading the way, with traditional energy companies pursuing pragmatic transformation. The pace of energy transition is most evident within the global power system. According to research released by energy think tank Ember, in the first half of 2025, renewable energy surpassed coal for the first time to become the world's largest source of electricity. This marks a historic turning point in the global energy structure.

Against the backdrop of the power sector's green transition, traditional oil companies face dual pressures: on one hand, the conventional oil and gas market grapples with oversupply and sustained price pressures; on the other, nations' emissions reduction commitments are accelerating from policy frameworks to concrete implementation. Under these dual pressures, international oil companies are actively exploring a more pragmatic and rational transformation path.

North American oil companies are firmly focusing on areas with high technical barriers that can deeply synergize with traditional oil and gas infrastructure. ExxonMobil has positioned carbon capture, utilization, and storage (CCUS) technology as a pillar of its low-carbon business and is committed to developing it into a profitable commercial service. The company is exploring natural gas power generation solutions with integrated CCUS for high-energy consumers like data centers, pioneering new business models. Its 1.2-gigawatt data center base project with NextEra Energy will utilize natural gas power generation and carbon capture technology to reduce emissions, with plans to launch in Q1 2026. Chevron is also actively expanding its CCUS portfolio, forming a low-carbon business matrix that synergizes with its core operations.

European international oil companies are undergoing a rational recalibration of their energy transition pace. bp will welcome new CEO Meg O'Neill in 2026. The market widely expects her to conduct a comprehensive review and assessment of bp's strategy, optimizing tactics within its already significantly scaled-back low-carbon investment framework. Shell will increasingly center its strategy around natural gas while considering divesting portions of its renewable energy business. TotalEnergies' strategy also leans toward natural gas, having initiated divestments of renewable energy assets in non-core markets like Asia to optimize its portfolio. However, its low-carbon power businesses in core markets such as Europe and the United States will continue to develop.

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