On the last day of 2025, the energy world is caught between ambition and reality. We are 25 years from net zero, yet still deeply reliant on oil. Even so, and despite lingering geopolitical tensions across key producing regions, oil prices have stayed comfortably below the $100-a-barrel mark. As we enter the new year, most analysts expect oil to remain well below even the $60/b mark. Even if prices rally, most expect no dramatic spikes, with Brent, the world’s main crude benchmark, likely to remain in a sweet spot in the $60s.
This may not be the best news for Middle Eastern crude producers whose economies and spending plans hinge on higher oil revenue. However, for billions of people around the world, lower oil prices mean cheaper travel, cheaper goods and a more affordable cost of living.
As the year ends, I take a look at the trends likely to shape oil prices and demand over the next 12 months.
Oil prices, or specifically benchmark Brent, are set for a muted start to the year, after posting their steepest annual decline since 2020, after the height of the Covid-19 lockdowns.
As my colleague Fareed Rahman writes, the oil market is moving into a phase of structural imbalance, with supply growth expected to run at around three times the pace of demand despite steady gains in consumption.
What does the demand outlook look like in 2026?
Global oil demand is expected to rise by about 900,000 barrels per day in 2025, taking total consumption to roughly 105.5 million bpd. A similar increase is forecast for 2026, with growth picking up further in 2027.
Where is the imbalance?
Supply is set to grow much faster than demand in 2025 and 2026, at roughly three times the pace. That expansion is being driven by higher output from both Opec+ and non-Opec producers.
What’s the impact on price?
Brent crude is likely to slip below $60/b in 2026, fall into the low $50s by Q4 and potentially end the year at even lower levels, according to Ahmad Assiri, a research strategist at Australia-based broker Pepperstone. UBS expects Brent to trade between $60 and $70 a barrel next year, with only brief excursions outside that range.
2025 has been a year of sanctions and captured oil tankers, whether they’re Russian, Iranian or Venezuelan. With so much embargoed oil in the sea, it is unsurprising that oil prices remain depressed. But with oil tankers floating with no specific destination in sight, does it imply a collapse in demand?
Kpler’s Amena Bakr writes that the build-up of crude at sea does not mean lower demand. She points to the persistent decline in product stocks, which shows people are still consuming even if unrefined crude still remains lost at sea.
Why is there oil on water?
Since early September, an additional 215 million barrels of crude have accumulated at sea, increasing oil-on-water volumes by about 19 per cent, according to analysts at Kpler. Total oil floating on the water is now around 1.3 billion barrels.
Is this a 2020 repeat?
Not quite. While the surplus is becoming more visible, it remains manageable. Unlike 2020, when storage ballooned as demand collapsed, today’s build-up is happening alongside healthy product demand and strong refining margins.
Could this surplus find buyers?
Yes. Pricing dynamics, including discounts on crude, particularly Russian Urals, are likely to encourage additional buying, particularly from major importers such as India and China.
Jargon buster
Inventory: While it could mean a number of things outside the energy world, traders use this word to describe stockpiles of crude oil and refined products such as gasoline and diesel.
Big number
$100 per barrel
Once the oil market’s north star, $100 crude last flashed on screens in 2022 after Russia’s invasion of Ukraine. As the industry looks ahead to 2026, that price point is increasingly a relic of the oil age.
Our top energy reads
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Hotel Data Cloud profile
Date started: June 2016
Founders: Gregor Amon and Kevin Czok
Based: Dubai
Sector: Travel Tech
Size: 10 employees
Funding: $350,000 (Dh1.3 million)
Investors: five angel investors (undisclosed except for Amar Shubar)
MATCH INFO
Uefa Champions League quarter-final second leg:
Juventus 1 Ajax 2
Ajax advance 3-2 on aggregate
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Director: Stephen Merchant
Stars: Dwayne Johnson, Nick Frost, Lena Headey, Florence Pugh, Thomas Whilley, Tori Ellen Ross, Jack Lowden, Olivia Bernstone, Elroy Powell
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Profile
Company name: Jaib
Started: January 2018
Co-founders: Fouad Jeryes and Sinan Taifour
Based: Jordan
Sector: FinTech
Total transactions: over $800,000 since January, 2018
Investors in Jaib's mother company Alpha Apps: Aramex and 500 Startups
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KILLING OF QASSEM SULEIMANI
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
UAE currency: the story behind the money in your pockets
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Qalandars 112-4 (10 ovs)
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Qalandars win by six wickets
UAE currency: the story behind the money in your pockets
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
LA LIGA FIXTURES
Thursday (All UAE kick-off times)
Sevilla v Real Betis (midnight)
Friday
Granada v Real Betis (9.30pm)
Valencia v Levante (midnight)
Saturday
Espanyol v Alaves (4pm)
Celta Vigo v Villarreal (7pm)
Leganes v Real Valladolid (9.30pm)
Mallorca v Barcelona (midnight)
Sunday
Atletic Bilbao v Atletico Madrid (4pm)
Real Madrid v Eibar (9.30pm)
Real Sociedad v Osasuna (midnight)
FROM%20THE%20ASHES
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Dark Souls: Remastered
Developer: From Software (remaster by QLOC)
Publisher: Namco Bandai
Price: Dh199
Coal Black Mornings
Brett Anderson
Little Brown Book Group
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5. Jacob Birtwhistle (AUS) 57:40
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7. Jonathan Brownlee (GBR) 57:56
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10. Richard Murray (RSA) 57:59
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Motori Profile
Date started: March 2020
Co-founder/CEO: Ahmed Eissa
Based: UAE, Abu Dhabi
Sector: Insurance Sector
Size: 50 full-time employees (Inside and Outside UAE)
Stage: Seed stage and seeking Series A round of financing
Investors: Safe City Group
PROFILE OF INVYGO
Started: 2018
Founders: Eslam Hussein and Pulkit Ganjoo
Based: Dubai
Sector: Transport
Size: 9 employees
Investment: $1,275,000
Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri
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