The impact of decisions by U.S. President Donald Trump is expected to continue significantly affecting crude oil prices in the new year (2026), just as it has this year.
Oil prices fell sharply in 2025, with West Texas Intermediate crude declining from around $75 per barrel when Trump took office to below $60 recently.
Tariffs Affect Oil Prices
Analysts note that tariff policy was a major driver of this movement, as trade uncertainty affected economic confidence and demand forecasts.
Oil markets remain highly sensitive to Trump’s policy choices, especially regarding geopolitics and sanctions.
It is explained that Trump’s decisions could affect oil prices through two potential scenarios. The first is reaching a peace agreement between Russia and Ukraine, which could allow Russian oil exports to return to normal and enable affected refineries to resume diesel production.
In this case, a decline in diesel prices—which have helped support crude oil prices—is expected. Experts warn this represents a clear risk for a near-term drop in crude oil.
Trump’s Policies Towards Venezuela Are Influential
The second potential scenario centers on Venezuela. It is suggested that Trump’s approach “could open the door to increased oil imports and, more importantly, renewed investment that would boost production in the medium term.”
This scenario would be particularly negative for Canadian heavy oil, as Venezuelan barrels compete directly with oil sands grades in U.S. Gulf Coast markets.
Expectations of a Rise in Global Oil Inventories at the Start of 2026
Oil markets are preparing for a significant wave of supply in the first quarter of 2026. Production from non-OPEC countries rose by about 1.6 million barrels per day in 2025, led by the United States, Brazil, and Kazakhstan.
The International Energy Agency (IEA) expects slightly slower growth of about 1.3 million barrels per day, with the United States, Brazil, and Guyana continuing to lead the gains.
Despite the slower growth, the supply additions are still large enough to put pressure on prices at the start of the year.
OPEC is also contributing to near-term oversupply as it eases production cuts. However, it is argued that key figures overestimate the amount of actual spare production capacity that exists.
Potential Decline in OPEC’s Production Surplus
Many members are already producing at or near maximum capacity, meaning the actual increase in physical barrels has been smaller than announced.
It is estimated that OPEC’s spare production capacity could fall to about 1 to 1.4 million barrels per day once current adjustments are complete, which is significantly lower than widely cited estimates.
Expectations of Price Declines Early in the New Year and a Return to Balance Later
As a result, analysts expect inventories to increase in early 2026, but they see the market tightening later in the year.
It was stated: “We believe oil prices may face some near-term downward pressure but will ultimately strengthen as attention focuses on the evaporation of OPEC’s spare production capacity.”
West Texas Intermediate crude is also expected to trade in a range of $55 to $60 in the first half of the new year as supply growth is absorbed, before moving towards $60 to $65 in the second half as the supply wave peaks.
United States
The United States is a federal republic founded in 1776 after declaring independence from Great Britain, with its modern government established by the Constitution in 1789. Its history is marked by westward expansion, industrialization, and its emergence as a global superpower in the 20th century. The nation is defined by its diverse cultural heritage, shaped by immigration and the complex legacy of its indigenous populations and the institution of slavery.
West Texas
West Texas is a vast, arid region in the southwestern United States, historically defined by cattle ranching, oil booms, and its role as a frontier. Its cultural identity is deeply tied to the rugged landscapes of the Big Bend and the Davis Mountains, as well as a distinct musical heritage blending country, rock, and Tejano influences.
Russia
Russia is the world’s largest country by area, spanning Eastern Europe and Northern Asia. Its history is marked by the rule of the Tsarist Empire, the Soviet Union as a superpower during the Cold War, and its current status as the Russian Federation following the USSR’s dissolution in 1991. The nation is renowned for its vast landscapes, rich literary and artistic traditions, and complex political history.
Ukraine
Ukraine is a country in Eastern Europe with a rich history dating back to the medieval state of Kyivan Rus. It has experienced periods of independence, foreign rule, and was a key part of the Soviet Union before regaining its sovereignty in 1991. The nation is known for its diverse cultural heritage, Orthodox Christian cathedrals, and the ongoing struggle to preserve its national identity.
Venezuela
Venezuela is a South American country with a history of indigenous inhabitation prior to Spanish colonization in the 16th century. It gained independence in the early 19th century and is known for its significant oil reserves and diverse natural landscapes, including Angel Falls, the world’s tallest waterfall.
Canada
Canada is a country in North America formed through the union of British and French colonial territories, achieving full sovereignty from the United Kingdom in 1982. It is known for its vast natural landscapes, multicultural society, and a constitutional monarchy that recognizes both English and French as official languages.
U.S. Gulf Coast
The U.S. Gulf Coast is a region along the southern shoreline of the United States, bordering the Gulf of Mexico and encompassing coastal areas from Florida to Texas. Historically, it has been shaped by Indigenous cultures, European colonization, and its economic reliance on industries like fishing, shipping, and offshore oil production. The region is also known for its distinctive cultural blend, vibrant ecosystems, and vulnerability to hurricanes.
Brazil
Brazil is the largest country in South America, known for its vast Amazon rainforest and vibrant cultural exports like samba and football. Its modern history began with Portuguese colonization in 1500, leading to independence as an empire in 1822 and the establishment of a republic in 1889. Today, it is a diverse federal republic celebrated for its multicultural heritage and major cities like Rio de Janeiro and São Paulo.
Kazakhstan
Kazakhstan is a Central Asian nation with a rich nomadic heritage, historically shaped by its position along the Silk Road and as part of various empires, including the Mongol Empire and the Russian Empire before becoming a Soviet republic. It gained independence in 1991 following the dissolution of the USSR and is known for its vast steppes, modern capital Nur-Sultan (Astana), and its cultural blend of Turkic and Russian influences.
Guyana
Guyana, located on the northern coast of South America, is the only English-speaking country on the continent, a result of its history as a British colony until its independence in 1966. Its cultural heritage is a diverse blend of Indigenous, African, Indian, European, and Chinese influences, reflected in its traditions, festivals, and cuisine. Notable cultural and natural sites include the historic capital of Georgetown, with its distinctive wooden architecture, and the vast, pristine rainforests of the interior, which are part of the Guiana Shield.
OPEC
OPEC, or the Organization of the Petroleum Exporting Countries, is an intergovernmental organization founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Its primary purpose is to coordinate and unify the petroleum policies of its member countries to secure fair and stable prices for oil producers. Historically, OPEC has played a significant role in the global oil market, most notably through the 1973 oil embargo, which had major worldwide economic and political impacts.
International Energy Agency
The International Energy Agency (IEA) is an intergovernmental organization founded in 1974 in response to the 1973 oil crisis, with an initial focus on coordinating measures for oil supply security. Today, it serves as a key global authority on energy data, analysis, and policy advice, promoting reliable, affordable, and clean energy for its member countries and beyond.
