The World Bank's October 2026 Commodity Prices Outlook report has predicted that crude oil will average $79.0 per barrel in 2027. This forecast represents a decline from the expected average of $91 per barrel in 2026. According to the report, global oil consumption is anticipated to contract by 2.5% in 2026, marking the third-largest decline on record.
The decline in oil consumption is attributed to various factors, including disruptions to petrochemicals production due to feedstock shortages and curbs on exports. Additionally, the substitution of oil with other industrial processes amid high prices and reduced need for transport fuels as adoption of electric vehicles increases, especially in China, are also contributing to the decline. This trend is expected to continue, with global oil supply projected to fall by 5.2% in 2026.
The 5.2% decline in global oil supply in 2026 is expected to be the largest in more than four decades, excluding the 2020 global recession. While modest increases in oil output in advanced economies such as Canada and the United States, as well as in Latin America and the Caribbean, are anticipated, they will only offset a small share of the significant production losses in the Middle East.
The World Bank report also noted that operational adaptations have facilitated increased crude oil exports from the Gulf region in recent months. These adaptations are assumed to remain effective, allowing shipments to continue gradually building. This development is expected to contribute to the stabilization of oil prices in the coming years.
In 2028, the crude oil price is expected to drop further to $70 per barrel. This forecast is based on the anticipated decline in global oil consumption and the projected increase in oil supply. The World Bank's Commodity Prices Outlook report provides valuable insights into the trends and forecasts of various commodities, including crude oil.
The fluctuations in crude oil prices have significant implications for Ghana's economy, as the country is a major producer of crude oil. The forecasted decline in crude oil prices may impact the country's revenue from oil exports. Therefore, it is essential for the government to diversify the economy and reduce its reliance on oil exports.
The World Bank's forecast of crude oil prices highlights the need for Ghana to develop a comprehensive strategy to mitigate the impact of fluctuations in global commodity prices. By diversifying the economy and investing in other sectors, Ghana can reduce its vulnerability to external shocks and ensure sustainable economic growth.
Key points
- Crude oil price forecast: $79 per barrel in 2027 and $70 per barrel in 2028.
- Global oil consumption is anticipated to contract by 2.5% in 2026.
- Global oil supply is projected to fall by 5.2% in 2026.
