Global oil benchmarks have been falling as the market faces the prospect of a growing surplus.Brent is estimated to have declined some 18% in 2025 so far, while WTI is down close to 20%, as the market has steadily priced out the war driven risk premium of the early 2020s and refocused on swelling supply.The International Energy Agency forecast in November that global supply will outweigh demand by 2.4mn barrels per day (bpd), and expects the gap to expand to a record 4mn bpd next year.On the other hand, the Organisation of the Petroleum Exporting Countries (Opec) strongly disputes the idea of a huge oversupply.In its latest monthly report, the group says Opec+ produced 43.06mn bpd in November. It forecasts that demand for Opec+ crude will average 43mn bpd in 2026, almost exactly matching current production.Opec+ has also said it will pause further production increases in the first quarter of 2026, citing widespread predictions of oversupply and signalling that it is prepared to defend prices if needed.The Middle Eastern oil market has also weakened in recent weeks on concern that regional supplies will outstrip demand.Among widely watched metrics, the premium of Abu Dhabi’s flagship Murban over Brent has declined to the narrowest since early October.The shift signals concern too much crude is being offered in the Middle East than can readily be bought by refiners in Asia at a time of higher, competing worldwide output, according to a Bloomberg report.A low-oil-price environment is good for buyers, especially large net importers such as China, which has been filling up its strategic reserves, and India, which has faced US pressure to stop buying Russian crude.Cheaper oil can translate into lower fuel prices. US President Donald Trump likes to use the price of gasoline as an economic barometer and during last year’s election pledged to bring it below $2 a gallon.But here’s other side of the narrative.For oil exporters whose economies are heavily dependent on the oil industry, subdued prices could weigh on their revenue and put pressure on fiscal budgets.Saudi Arabia, the world’s second-largest oil producer after the US, is seeking to diversify its economy through the Vision 2030 programme. However, the massive investments being made in mega projects have arguably left the kingdom even more dependent on oil revenue.Western sanctions have made Russian oil exporters heavily dependent on buyers in China and India, who have demanded discounts to keep importing this seaborne crude.The US shale industry has been the world’s engine for oil-production growth in recent years, but the momentum is now slowing. Many producers need an oil price of around $65 a barrel to turn a profit and have been looking to increase their output at less than 5% annually as crude prices hover near the break-even threshold.Looking forward, Wall Street investment banks see low $60s, or even lower, for oil prices in 2026.A Reuters poll of 35 economists and analysts, published late November projects Brent averaging about $62.23 in 2026 and WTI around $59, with “swelling supplies” expected to keep prices under pressure.Goldman Sachs recently forecast Brent at $56 and WTI at $52 in 2026, warning of a roughly 2mn bpd surplus.The latest US Energy Information Administration Short Term Energy Outlook released on December 9 projects Brent averaging about $69 per barrel in 2025, then dropping steeply to around $55 per barrel in 2026, staying near that level all year.Weaker prices could translate into major oil producing countries losing money, regardless of the market share they enjoy. Also, lower-for-longer oil can cut investments to develop new oil and gas fields.But oil companies say global energy future envisages rising demand and population growth, making oil an important fuel for decades to come.