Barclays has decreased its Brent crude price forecast, with expectations now set at $66 per barrel in 2025 and $60 in 2026. This adjustment stems from faster-than-anticipated production increases by OPEC+.

OPEC+ increased output by 411,000 barrels per day in June, continuing its trend of heightened supply. Saudi Arabia is urging members like Iraq and Kazakhstan to enhance production to adhere to quotas. Barclays anticipates OPEC+ will remove voluntary production cuts by October 2025, earlier than formerly predicted.

Us Crude Production Decline

The bank projects a decline in U.S. crude production, expecting a drop of 100,000 barrels per day in 2025 and 150,000 barrels per day in 2026. Early Monday saw Brent crude falling by over $2, landing at $59.20.

Barclays recognises that increased supply growth may ease global oil market balances, potentially impacting prices. Previously, OPEC+ warned of ending cuts if compliance persisted. Morgan Stanley also cut its 2025 Brent forecast by $5 per barrel.

Some analysts suggest that OPEC’s production increase represents a formalisation of existing overproduction more than a bearish shift, as the rise primarily affects production ceilings rather than actual output.

What’s been laid out so far is a clear move towards a world where oil supply looks to be increasing at a quicker pace than expected, thanks largely to output dynamics within the OPEC+ group. Barclays has trimmed its price predictions for Brent crude, citing rapid output growth, particularly from countries that have not strictly observed agreed quotas. The revised figures indicate a $66 average price per barrel in 2025, dipping further to $60 in 2026. There’s also consistent indication that previously voluntary production cuts are now expected to be fully lifted as early as October next year—sooner than earlier projections had suggested.

That tells us something very workable—we’re looking at a market where supply is pressing harder into the global system than demand can necessarily handle. When output goes up steadily while consumption remains relatively stable or slows, prices tend to reflect the pressure. The latest move from Saudi Arabia puts added pressure on partners like Iraq and Kazakhstan to produce in line with targets, which reinforces expectations on supply persistence. Given that similar price downgrades have now come from multiple large banks, such as the one from Morgan Stanley, there’s growing consistency among outlooks.

Global Oil Market Trends

What’s also useful here is the contrasting outlook on American production. U.S. crude output is widely expected to decline over the next two years, offering a small counterweight to the global increase. But the size of this reduction—100,000 barrels per day in 2025—pales next to the ramp-up being seen elsewhere. From our perspective, this mismatch reinforces pricing pressure. Even with U.S. output easing slightly, global surplus could continue to expand.

Brent falling below $60 is not only symbolic—it signals how downward re-pricing is already bleeding into the market. And it’s not enough to brush this off as temporary. When broader producers maintain or lift supply levels, and when key participants weaken voluntary limits, longer-term pricing floors tend to fall with them.

It helps to focus attention not on the production figures alone, but on what these say about market discipline. What was once informal overproduction is now edging into being officially recognised. That removes one source of unresolved uncertainty and feeds into more transparent expectations. With ceilings adjusted upwards, compliance stretches are no longer the wildcards they once were. That could reduce volatility in some areas, especially shorter-term spreads, but it also makes extended rallies less likely.

As we see it, the net effect is becoming clearer. This is a setup that invites greater sensitivity in positioning, particularly across contracts that extend into late 2025 and beyond. Positions built around prior production constraints must now adapt in real-time, accounting for a forward curve that may deepen its contango. We shouldn’t assume a reversion without new structural changes.

The broad recalibration from leading banks reflects neither panic nor novelty—it’s based on observable production shifts and quota enforcement patterns. Trading around those shifts will likely demand closer attention to how quickly the group moves to formalise adjustments. These aren’t passing moves; they’re now finding traction in price levels we haven’t seen since the first waves of global reopening.

So if markets appear softer, it’s not sentiment—they’re pricing tangible forces. Supply metrics are reshaping expectations on a monthly basis, and unless there’s a reversal in policy, or a demand shock somewhere, little points to a shake-up strong enough to halt current trends.

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