Barclays lowered its Brent crude forecast on Monday by $4 to $70 a barrel for 2025 and set its 2026 estimate at $62/b, citing “a rocky road ahead for fundamentals” amid escalating trade tensions and OPEC+’s pivot in its production strategy.
Despite oil market fundamentals evolving “significantly better than expected” in early 2025, the bank now projects a surplus of 1 million barrels per day this year and 1.5 mb/d in 2026.
It warned that the market’s “limited shock-absorption capacity” could leave prices vulnerable in the near term.
Barclays noted that while demand had remained resilient, buoyed by stronger Chinese consumption and property market stabilization, the broader macro outlook had deteriorated.
“The sharp increase in trade barriers hits activity, which seems to have been flattered by front-loading of late,” it said.
On supply, non-OPEC output forecasts were revised 270 thousand barrels per day (kb/d) lower due to the downside surprises so far in the U.S., Canada, Brazil and Norway and a lower price outlook, Barclays said.
U.S. crude production was now expected to be flat year-on-year in the fourth quarter of 2025, versus previous growth estimates, while OPEC production outlooks were lifted by 240 kb/d on the recent acceleration in the phase out of the additional voluntary adjustments by key members, the bank said.
Barclays highlighted two potential scenarios: Brent could average $75 a barrel if trade tensions ease and OPEC+ moderates its stance, but could “test the low-50s for a sustained period” if demand falters and OPEC+ maintains its current course.
“Despite fairly strong spot fundamentals, we think oil prices are likely to be on a rocky road for the months ahead,” Barclays said.
(Reporting by Sherin Elizabeth Varghese, Anjana Anil and Ashitha Shivaprasad in Bengaluru. Editing by Mark Potter)