anubhai
Back OfficeMarket Speaks: Global liquid fuels production set to increase 1.2 mbpd in 2026 after 3 mbpd in 2025
10-Dec-2025
11:19
Energy Information Administration or EIA has stated in a latest monthly update that global liquid fuels production in its forecast increases by 3.0 million b/d in 2025 and by more than 1.2 million b/d in 2026. Along with OPEC+, the United States, Brazil, Guyana, and Canada drive production growth in the forecast. Together these four countries contribute more than 50% (1.5 million b/d) of total global growth this year and about 60% (0.8 million b/d) in 2026. Production in South America has been the leading source of growth in 2025 as new offshore vessels have started up ahead of schedule in Brazil and Guyana, with additional projects still in development.
EIA forecast that global oil inventory builds will exceed 2 million barrels per day (b/d) in 2026, which is similar to this year’s increase. Persistent inventory builds could fill commercial storage options on land, which may prompt market participants to increasingly seek other, more expensive options for storing crude oil, such as floating storage. As a result, some of the crude oil price declines will likely reflect the higher marginal cost of storage.
Although EIA expects prices to fall in 2026, we assess that both OPEC+ policy and China’s continued inventory builds will limit declines. Given the expectation of substantial global oil inventory builds, it forecasts OPEC+ will produce about 1.3 million b/d less than targeted production in 2026. On November 30, OPEC+ reaffirmed plans to keep production flat in the first quarter, but left open the potential for future adjustments. A large portion of oil inventory builds this year have been in strategic stockpiles in China, which has limited downward price pressures. China will continue building strategic stockpiles into 2026.
Meanwhile, EIA noted that forecast global liquid fuels consumption increases by 1.1 million b/d in 2025 and by 1.2 million b/d in 2026. Global liquid fuels consumption growth is driven almost entirely by non-OECD countries.
EIA forecast that global oil inventory builds will exceed 2 million barrels per day (b/d) in 2026, which is similar to this year’s increase. Persistent inventory builds could fill commercial storage options on land, which may prompt market participants to increasingly seek other, more expensive options for storing crude oil, such as floating storage. As a result, some of the crude oil price declines will likely reflect the higher marginal cost of storage.
Although EIA expects prices to fall in 2026, we assess that both OPEC+ policy and China’s continued inventory builds will limit declines. Given the expectation of substantial global oil inventory builds, it forecasts OPEC+ will produce about 1.3 million b/d less than targeted production in 2026. On November 30, OPEC+ reaffirmed plans to keep production flat in the first quarter, but left open the potential for future adjustments. A large portion of oil inventory builds this year have been in strategic stockpiles in China, which has limited downward price pressures. China will continue building strategic stockpiles into 2026.
Meanwhile, EIA noted that forecast global liquid fuels consumption increases by 1.1 million b/d in 2025 and by 1.2 million b/d in 2026. Global liquid fuels consumption growth is driven almost entirely by non-OECD countries.
Powered by Commodity Insights