Oil and Energy Markets: Outlook and Risks

by Nato Balavadze

In this paper, we discuss:

• A growing oil market surplus in 2026, keeping downward pressure on prices;
• Asymmetric price risks, with peace or sanctions easing pushing Brent into the low, while tighter sanctions or OPEC+ cuts pose upside risks;
• The resilience of US oil production despite lower prices;
• A shifting geopolitical energy map, as China deepens reliance on sanctioned suppliers (Iran, Russia) and the EU accelerates its exit from Russian gas.

Download PDF: Oil and Energy December 2025