Fiscal Policy Office cuts 2026 Dubai crude forecast to US$82 on weaker demand
The FPO expects Dubai crude to average US$82 a barrel in 2026, down from US$91, with easing supply risks likely to pull prices lower from Q4
- Thailand's Fiscal Policy Office has lowered its 2026 forecast for the average Dubai crude oil price to US$82 per barrel, down from a previous estimate of US$91.
- The primary reason for the reduction is weaker global demand, with consumption constrained by high prices and government measures, particularly in Asia.
- An expected recovery in global oil supplies and trade flows by the end of 2026, following earlier disruptions, also contributed to the lower price forecast.
- The revised forecast places the average price within a range of US$77-$87, with prices expected to begin weakening in the fourth quarter of 2026 as production recovers.
Thailand’s Fiscal Policy Office has cut its assumption for the average Dubai crude oil price in 2026 to US$82 a barrel, down from the US$91 estimated in April, as weaker demand and an expected recovery in global supplies ease some pressure on the market.
The revised forecast places the average price within a range of US$77-US$87 a barrel. Despite the reduction, the estimate remains substantially higher than the 2025 average of US$69.40.
Warotai Kosolpisitkul, international economic adviser at the Fiscal Policy Office, said the US$82 estimate was based on a conservative assessment that already incorporated major geopolitical and supply risks.
Lower demand limits price increases
Warothai said declining oil consumption had helped prevent prices from rising further.
The US Energy Information Administration forecast in June that global liquid-fuel consumption would fall by 1.1 million barrels per day in 2026, rather than by 1.1%, as high prices, reduced availability and government measures constrained demand, particularly in Asia.
China reduced crude imports during the first half of the year and relied more heavily on oil held in strategic reserves, according to the FPO’s assessment.
Supply remained constrained during the middle of the year as producers cut output and disruption around the Strait of Hormuz restricted shipments.
The EIA subsequently raised its production forecast after traffic through the strait resumed. It expects most global crude production and trade flows to return close to pre-conflict levels by the end of 2026, with most shut-in output restored during the first quarter of 2027.
Oil prices averaged about US$90 a barrel between January and July and rose as high as US$97 during some periods, he said.
Tensions in the Middle East, disruption in the Red Sea and US military operations in Venezuela had heightened concern over global oil production and transport routes.
Prices expected to ease from fourth quarter
The FPO expects crude prices to remain volatile during the third quarter, with a continued risk of increases if geopolitical tensions or supply disruptions intensify.
The outlook should begin to improve in the fourth quarter, with prices expected to weaken through 2027 as production recovers and global stocks rebuild.
The EIA forecasts global oil inventories will increase by about 2.7 million barrels per day in the fourth quarter of 2026 after substantial withdrawals during the second and third quarters. It expects the inventory build to accelerate to 5 million barrels per day in 2027.
The agency also forecasts Brent crude to fall from an average of US$103 a barrel in the second quarter to US$70 in the fourth quarter, before averaging US$65 in 2027.
Warotai said the Finance Ministry would continue monitoring the Middle East, OPEC+ production policy and China’s economic recovery.
Oil-price movements will remain important for Thailand because they affect inflation, global supply-chain costs and the direction and volatility of the baht, he said.
The Dubai crude assumption forms part of the Finance Ministry’s July economic forecast, which projects headline inflation of 2% in 2026.
