Global Energy Prices Expected to Decline Sharply Over the Next Two Years
According to the latest Commodity Markets Outlook published by the World Bank in October 2025, the global energy price index is expected to decrease by 12% in 2025, followed by an additional 10% decline in 2026. This trend is primarily driven by a growing surplus of oil in the global market, combined with stagnant demand.
Key Predictions
- The price of Brent crude oil is expected to drop to $68 in 2025, down from $81 in 2024, and further decrease to $60 in 2026.
- The Organization of the Petroleum Exporting Countries (OPEC) and its allies have increased their production quotas, while global economic growth remains sluggish and the transition to electric vehicles reduces demand for fossil fuels.
Global Oil Supply Exceeds Demand
The report highlights that the global oil supply far exceeds demand, with an estimated production surplus in 2026 that is 65% higher than the last peak recorded in 2020. This abundance of oil is putting downward pressure on all energy markets.
Impact on Other Energy Markets
- Australian coal prices are expected to decline by an additional 7% in 2026.
- Natural gas prices are expected to show contrasting trends, with an 11% increase in the United States and an 11% decrease in Europe, as the European Union reduces its imports from Russia.
Future Outlook
The World Bank anticipates a slight rebound in 2027, with a 6% increase in the energy index, but warns that risks remain oriented towards the downside. A weaker-than-expected global growth or a new wave of overproduction could exacerbate the decline in prices.
Potential Risks and Opportunities
- Increased geopolitical tensions or new sanctions on Russian oil could temporarily reverse the trend.
- For energy-importing countries, this development could be beneficial, as lower oil prices "offer an opportunity to reduce energy subsidies and redirect public spending towards health, education, or climate transition," according to the World Bank.
