Global energy markets face a fragile balance in 2026 despite apparent supply comfort, as geopolitical shocks expose deeper risks, Rystad Energy said Tuesday.
The market shows steady near-term supply, yet rising Middle East tensions and disrupted shipping routes reveal underlying vulnerability and tighten access to crude flows, Rystad Energy said.
Offshore oil output declines by about 6% annually, forcing the industry to add nearly 1.7 million barrels per day just to maintain current production levels, the firm said.
Developers require five to seven years to bring deepwater projects online, so current investments mainly prevent sharper output declines in the early 2030s rather than creating excess supply, Rystad Energy said.
Producers now prioritize lower-cost, lower-emission resources, while the sector still needs to develop roughly 540 billion barrels of liquids by 2050 amid growing gas supply gaps.
Capital may gradually shift toward stable regions, although uncertainty remains high as geopolitical risks continue to influence investment decisions across key producing areas, Rystad Energy said.
Brazil, Guyana, and the US Gulf of America attract stronger investor interest due to the quality of their resources and export access, the firm said.
Offshore investment could reach about $124 billion in 2026, yet the industry must sustain higher long-term spending and adopt advanced technologies to secure future supply stability, Rystad Energy said.
The global liquids market flipped in 2026 from an expected 3 million b/d surplus to a supply shock driven by Middle East conflict and Strait of Hormuz disruptions.
Brent crude forecasts jumped to about $87 per barrel for 2026 from $60 earlier, while prices may ease to around $72 in 2027 as supply conditions gradually stabilize, Rystad added.
Markets may face a temporary deficit of about 2.4 million b/d between March and May, largely due to transport bottlenecks rather than insufficient global production capacity, the firm said.
Up to 10 million b/d of supply remains trapped near Hormuz, while output growth from the US, Brazil, and Guyana offsets only about 20% to 25% of disrupted volumes, Rystad Energy said.
The disruption highlights that supply accessibility, not availability, drives market stress, even as long-term fundamentals still point to adequate global resources.
Even if current disruptions ease within a year, recent project approvals in stable regions will support long-term supply balance, as these investments aim to meet future demand rather than create excess output.
Offshore developments will play a critical role later this decade, as current project approvals help counter natural declines and support supply stability into the early 2030s, Rystad Energy said.
The industry is improving supply quality alongside volume, as technologies like EHTF, HISEP, and 20k PSI systems lower costs and emissions, enabling newer offshore projects to replace higher-cost, higher-carbon sources over time.
The industry must sustain annual investment near $640 billion through 2050, while adopting new technologies and shifting toward secure regions to maintain balance in an increasingly volatile energy system, the firm said.