We sat down with FocusEconomcis economist and editor Matthew Cunningham to learn about the forces that shaped oil and gas markets in 2025 and the outlook for 2026. In this Q&A, Matthew discusses how fundamentals, policy decisions and geopolitical developments influenced price movements across crude oil and natural gas, highlighting the contrasting trajectories of the two commodities. The discussion also looks ahead to next year, exploring expectations for supply, demand, LNG capacity and geopolitical risks that will continue to define energy markets.
FocusEconomics: What impact will Maduro’s capture by the U.S. have on the oil market?
Matt Cunningham: Put concisely: The impact of Maduro’s capture on the oil market will depend on how quickly and painlessly the U.S. can enforce regime change in Venezuela. A chaotic transition could imperil the country’s approximately 0.8 million barrels per day (mbpd) of crude output, while a swift transition, according to a recent analysis by JPMorgan, one of our panelists, could raise the country’s output by up to 0.6 mbpd in the next two years and by another 1+ mbpd over the next decade.
In any case, Maduro’s capture is unlikely to have a very big impact on oil prices, as Venezuela’s oil output is equivalent to less than 1% of the global total.
FE: Which forces, fundamentals, speculation, or geopolitics, defined 2025 oil and gas prices, and which will dominate in 2026?
MC: A graph of Brent crude oil prices this year could serve as a tapestry to understand the key events in the market this year.
Throughout the year, prices have continued the downtrend they began in April last year as OPEC+ continued to hike output and China’s economy continued to struggle under the weight of a flailing property sector, downbeat consumer confidence, overindebted local governments and flagging external demand.
We can see that Trump’s “liberation day” tariffs pushed prices down to a level from which they’ve not recovered from, barring a spike in June as a result of the 12-day Iran-Israel war.
Since then, Brent crude oil prices have continued to fall as OPEC+ caught the market off guard with its aggressive output hikes, which were designed to win back market share from non-cartel producers.
Regarding natural gas, prices were also negatively affected by Trump’s tariff announcement, but apart from that, for this commodity, the story of 2025 has been rather different. Prices have trended up, with the main U.S. benchmark, Henry Hub, now sitting at around a three-year high.
Trump’s election as U.S. President has been bullish for U.S. natural gas prices as he’s rushed to expedite licenses to export liquified natural gas exports, which have surged so far this year to record highs.
In 2026, our panel of economists projects the trends of 2025 to extend: Average Brent crude oil prices will ease further to a post-pandemic low, while U.S. natural gas prices will increase to the highest average level since 2014 barring 2022’s Russia-Ukraine-war-driven spike.
OPEC+ is set to continue raising output—after a pause in Q1 2026—and the global economy should slow as the boost from export front-loading ahead of U.S. tariff wanes.
FE: Supply-side uncertainty has been a theme all year. How are OPEC+ production decisions interacting to shape the outlook for next year?
MC: Global oil and gas production is set to rise next year.
Organizations like the EIA and IEA have hiked their forecasts in recent months in response to OPEC+ increasing output unexpectedly fast and the recent surge in demand for U.S. LNG.
The real question is not if oil and gas production will increase, but by how much.
Recent frictions between members of the OPEC+ cartel will persist, with Russia likely to favor lower production levels given U.S. sanctions and countries like Saudi Arabia and the UAE eager to push production higher given their excess capacity and desire to win back market share from non-OPEC+ producers. Moreover, countries like Kazakhstan and Iraq continue to overshoot their quotas, and in late 2023 Angola left the cartel due to disputes over its allowed production level.
FE: On the demand side, do you see global consumption growth plateauing, or is the market still underestimating demand strength from Asia heading into 2026?
MC: Global demand for oil and gas should increase next year.
Our panelists see world oil production rising 1.1% in 2026 as non-OPEC+ countries such as Guyana and the U.S. hike output.
Natural gas demand is also set to increase, with the IEA estimating growth at around 2% with consumption at an all-time high on higher demand in the industrial and electricity sectors.
Asia is hungry for LNG; the IEA estimates the region’s natural gas demand will rise over 4% in 2026, with LNG imports up by 10%.
Of course, these forecasts could change quickly if the world economy or the oil and gas sector is subject to further shocks, which is why we recommend regularly checking the latest forecasts that are available.
FE: Several major LNG projects are coming online or advancing. How will new LNG capacity, especially from the U.S. and Qatar, influence global gas pricing in 2026?
MC: The big Qatari and U.S. LNG projects will help natural gas prices converge globally—our Consensus Forecast is for the percentage difference between U.S. gas prices (which tend to be lower due to huge domestic production) and those in Asia and Europe to ease to the lowest level since 2020, the year the pandemic sent gas demand plummeting.
In short, record U.S. LNG shipments will send up prices at home and lower them abroad.
Unlike oil, in the natural gas market, there tends to be more price divergence between regions as natural gas is harder to transport over large distances. Oil can be poured into a barrel and shipped, whereas natural gas first needs to be liquified if it’s to be sent overseas. Greater LNG capacity will help bridge this gap.
FE: Geopolitically, the Middle East, Russia, and West Africa each introduced volatility in different ways in 2025. Which regions pose the most significant risk, or opportunity, for supply stability in 2026?
MC: Russia-Ukraine peace talks will be key to watch ahead—Donald Trump has pushed for a peace agreement between the two to no avail. He has repeatedly threatened to abandon Ukraine. If he carries out these threats, it would be difficult for Europe and Ukraine to stand alone against Russia, which might force a pro-Moscow peace agreement which, in turn, would lead to sanctions being lifted against the country’s oil sector, boosting global oil production and dampening oil prices.