![COLUMN | Predictions for 2026: oil price movements, Venezuela's crude production and more [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2F2026-01-12%2F532inqa2%2FUntitled.jpeg?w=480&auto=format%2Ccompress&fit=max)
The 1973 James Bond film Live and Let Die features a crazy plot about a corrupt and brutal Caribbean dictator who runs a drug cartel and assassinates his enemies (just imagine!). It is vintage Bond stuff, as 007 soon finds himself trapped in a world of voodoo and gangsters, where he must escape from being eaten by alligators, and survive being dropped into a tank of sharks by the murderous villain Dr. Kananga.
It’s also a film about forecasting the future, as Bond meets Solitaire, a beautiful (obviously) and mysterious tarot reader, who has the power to see the future, at least until Mr Bond uses a rigged deck of tarot cards consisting entirely of cards of "The Lovers" to trick her into believing that it is destiny for them to become (ahem) partners. Unfortunately, when the British spy seduces Solitaire, she loses her ability to foretell fate.
This is a problem that anyone who has tried to make predictions can sympathise with, even if, unlike Solitaire, most pundits don’t face ritual execution at the hands of a crazed voodoo lord and a coffin full of venomous snakes.
Last week, we looked at the success and otherwise of my predictions for 2025. This week, we turn to 2026, and I must admit that I, too, feel rather like the freshly deflowered Solitaire in Live and Let Die.
The first ten days of 2026 have already wrecked most of the predictions made only last month by so-called experts. In quick succession, we have seen the United States kidnap and seize the President of Venezuela Nicolas Maduro and bring him and his wife to New York to face drug trafficking charges.
Then we saw US President Donald Trump threaten to seize Greenland from Denmark. He also blocked any work on any offshore wind farms in US waters, even those close to completion, citing national security concerns.
Oh, and Mr Trump said that the US will run Venezuela indefinitely, keep the revenue from oil it sells, and ensure that American oil companies invest billions there to increase production. This is despite the fact that the CEO of ExxonMobil bravely told the President that the country was “uninvestible” at present.
At the same time, the US Coast Guard seized the dark fleet tanker Marinera, which had re-flagged to Russia having attempted to evade American interdiction in the Caribbean.
There were riots in Iran as the population vented its frustration over forty years of rule by the ayatollahs and stagnating living standards, with 500 reported dead. The Ukrainians hit another dark fleet tanker in ballast in the Black Sea, an ICE agent shot dead an American citizen in Minneapolis, and Elon Musk’s supposed AI system was revealed to have been making illegal images of child abuse and revenge porn.
I am not sure I am allowed to use the phrase “batsh*t crazy” in my column, but it does feel like the most apt phrase to use to describe the world in which we are living, where the most insane stuff, which would have seen extremely improbable as recently as 2024, now seems to be the daily norm.
This makes prediction hard, but at the same time, it also makes the stigma of making wrong predictions much lower. A lot of extremely unlikely events now seem to be possible, if not likely. A US invasion of Cuba? Expected in 1961 but could now happen in 2026. A Japanese nuclear weapons programme? Could be possible in the coming years.
In a world where the rules of international relations, fiscal policy and long-standing global norms have been ripped up and thrown out, who could blame a columnist for not foreseeing that maybe Europe would ban Google or nationalise Tesla’s factories if Trump invaded Greenland, or that China might blockade a small Taiwanese island like Kinmen or Penghu and occupy it, or worse, or that North Korea might… whatever.
The Overton Window has never been wider or more frightening for eighty years.
There are two main ways of forecasting. Either one can study data intensely and number crunch and provide an analysis based on in-depth factual study. This often works when looking at simple issues.
Will Murphy Oil commercialise its Hai Su Vang oil discovery in Vietnam? We can assess the field reserves, look at the location and estimate the costs of extraction. Then we conclude that, yes, probably this field will be in production by the end of 2031. On this basis, I made the confident assertion that TotalEnergies will finally approve the development of its Venus oil field in deepwater off Namibia.
There are three main disadvantages to this data-driven approach when dealing with big and complex issues. Firstly, it takes a bunch of time to do properly, which I just don’t have as I'm writing this piece, and it’s usually not that interesting to read.
Secondly, this detailed modelling is always vulnerable to exogenous shocks, big events that come in from the outside and throw the carefully calibrated models into chaos, events like the attack on the Twin Towers on 9/11, the Russian invasion of Ukraine in 2022, or the Covid-19 epidemic. These were huge events that changed millions of lives radically, but which nobody saw coming with any degree of accuracy. Even those who recognised in 2021 that Putin might invade Ukraine did not anticipate that the war would last four years, and even those who believed that the world was vulnerable to a zoonotic pandemic did not foresee the economic impact of lockdown and travel restrictions.
And the third reason why these data-driven approaches fail is that they depend on continuity between the past and the present and the future, that what happened before is likely to be similar to what would happen in the future.
Sometimes, events like the Cultural Revolution in China or the Holocaust in Europe create such a disjuncture that the old models simply don’t apply. Using a template based on what happened in Eastern Europe before the fall of the Berlin Wall was of no use after the collapse of communism there.
The second method of forecasting is more akin to using tarot cards. The forecaster simply uses their gut, their instinct, the sum of their insight and experience. It is interesting that despite the trillions of dollars spent every year on crude oil and natural gas, no model seems to work with any degree of accuracy and most oil price forecasts are either based on “the vibe of the market” or are mostly just a reflection of today’s prices and trends extrapolated into the future.
When the oil price was US$100 in 2011, all the analysts had hundreds of very good reasons why it would stay there (it did for a long time), and when oil was below US$50 in 2020, many experts had great arguments to suggest that this situation would persist.
There are a number of big issues well above my pay grade, but they all feed into that issue of what the oil price will be. And it is that single number, the oil price, that will drive so much of the sentiment, investment, and activity in the offshore sector in the year ahead.
Let’s take a look at some of the global challenges.
1. Will Venezuelan oil production surge in 2026?
In 1999, when Hugo Chavez was elected President in one of the worst decisions in the history of democracy, Venezuela produced three million barrels of oil a day. Today, after a quarter century of neglect, corruption and the nationalisation of foreign assets, the country produces less than a million barrels a day.
Venezuelan crude is heavy, bituminous, and expensive to extract and store. It often needs to be blended with naphtha to ship it. To restore production will require a massive investment in maintenance all through the Venezuelan oil sector, from investment in work-overs and stimulation downhole, to the maintenance of aged and dilapidated platforms and wells, to the repair of pipelines and tank farms.
Billions and billions will have to be spent in a country that has repeatedly expropriated and nationalised foreign investments throughout the twentieth century.
The country remains run by a clique of thieving and brutal gangsters, even if Nicolas Maduro has been abducted and removed from power. I can confidently assert that at the end of 2026, Venezuela will not be producing more than a million barrels a day of oil.
Any meaningful increases in production will only be seen if sanctions are removed, if political stability and law and order is restored, and if foreign investment protection can be agreed. All those are big “ifs”.
The country is wrecked, its oil industry is decaying, and production has collapsed. It took twenty years for production to fall from three million barrels to less than one million barrels per day, despite the absolute back of investment by Chavez and Maduro and the transformation of the state oil company PDVSA from a competent institution into a piggy bank to be plundered by the Chavistas, its leadership transformed into political lackeys.
I would anticipate it being twenty years before the country is back to three million barrels a day of oil output, if ever again. Rystad Energy reckons it will take over US$187 billion of investment to achieve. Don’t hold your breath here.
2. Will the oil price end 2026 end below US$60 per barrel?
There is a widespread belief that the oil price could plunge below US$60 at any moment (Reuters coverage here). Analysts worry that a glut of crude could swamp demand.
Oil prices fell 20 percent in 2025 as OPEC increased its production and American shale oil production remained robust. With electric vehicles denting oil demand in China and fresh supply coming online from Guyana and from OPEC, the bearish case for oil is that another 20 per cent fall could be possible in the year ahead. It goes without saying that this would be a disaster for the drilling industry and for supply vessel operators and their crews.
Set against this are all the geopolitical risks we discussed above. The oil price thrives when there are wars and supply interruptions. The Iranian regime is on the defensive and could once again seek to restrict oil exports through the Strait of Hormuz, and if there was military action against Iran, the export facilities at Kharg Island might be a logical chokepoint.
Iran exports around two million barrels a day, so any interruption to Iranian exports – even if this was just the US Navy blockading the country like it did Venezuela in December – could potentially spike oil prices again.
Longer-term regime change in Iran could see the country finally increase production, but like Venezuela, it faces the challenge of reversing decades of neglect in the oil and gas industry. Like Venezuela, Iranian production facilities and export infrastructure need massive investment, and foreign investors will only spend there if sanctions are lifted and if there is political and investment stability.
If the mullahs remain in charge, I don’t see Iranain exports exceeding two million barrels a day in 2026, and they could be much less if Trump moves to throttle exports, which might invite retaliation on tankers moving Gulf crude through the Strait of Hormuz.
Then there is Asia, where a number of tensions and conflicts remain completely unresolved. If China were to strike at Taiwan, it is likely that the oil price could spike. If America annexed Greenland, the European powers might boycott American oil and gas.
In any case, Europe is unlikely to want to be as beholden to the US for energy as it was to Russia in the 2010s, so supply diversification will benefit producers in Africa and the Mediterranean as well as new projects in countries as diverse as Cyprus, Romania, Suriname and Senegal. Last week, TotalEnergies announced it and Eni had secured a new gas exploration block in Lebanon, despite an unsuccessful deepwater wildcat well in 2023 in a neighbouring block nine.
If the Russian regime collapsed, rather than a glut of Russian oil flooding the market, the next step might be some form of internal disruption in Russia that would further constrain supply. The risk of some form of conflict between Pakistan and India over Kashmir, or India and China in the Himalayas, or in the South China Sea between China and Vietnam or the Philippines flaring up cannot be ruled out.
I don’t think anyone foresaw in 2024 that Thailand and Cambodia might be fighting a border conflict against each other in 2025 with artillery and shooting, and whilst that conflict has remained contained, other disputes might not be so minimalised.
In the current crazy world, there are enough geopolitical risks to energy supply that whilst each individual risk carries a small probability of occurring, the probability that one of the bundle of “tail risks” occurs is not non-material.
Therefore, I expect that the oil price at the end of 2026 will be higher than US$60 per barrel. But I would say that, wouldn’t I?
3. Who will the Grim Reaper claim?
We live in a planet populated by eight billion people, yet old men dominate global affairs. That is not to say that I expect all or even any of them to meet their maker in the coming year.
Indeed, Zimbabwe President Robert Mugabe lived to 95. Lee Kuan Yew, the founding Prime Minister of Singapore and co-founder of the People's Action Party, died at the age of 91, and former Malaysian Prime Minister Mahathir Mohamad reached 100 last year and is still going strong, despite a recent broken hip. Former American President Jimmy Carter also reached one hundred years of age before he passed in 2024.
Former political leaders and even their spouses often have access to the best medical care, and there seems to be a trend for them to far outlive their national average life expectancy. Just ask former Philippine First Lady Imelda Marcos, who is now 96.
However, it is striking how many septuagenarians dominate the global political stage, and not all of them are going to be of sound mind or body in a decade from now, or even five years. Donald Trump, Xi Jinping, Narendra Modi and Vladimir Putin are all in their seventies, as are Recep Tayyip Erdoğan of Turkey, Benjamin Netanyahu of Israel, Cyril Ramaphosa of South Africa and Luiz Inácio Lula da Silva of Brazil.
Both the President and Supreme Leader of Iran are over seventy, as are the Presidents of Nigeria and Indonesia. In a democracy, this matters less, as mechanisms exist for a a smooth transition if a leader becomes infirm.
Europe is often derided by Americans as a sclerotic and ageing continent, but its leaders – namely, Macron, Starmer, Meloni and Merz – are a decade younger than those in Russia, America, China and India, let alone in Africa, where aged despots like 92-year-old Paul Biya in Cameroon and 84-year-old Teodoro Obiang in Equatorial Guinea rule over young populations. Janan Ganesh has written in the Financial Times that more than half of the world’s population, and much of its land area and military capacity, is in the hands of men who are over seventy.
One of the most striking scenes of Live and Let Die is when a funeral procession in New Orleans suddenly turns into an execution, then the body is scooped up into the coffin, and the jazz band strikes up a merry tune and turns the dirge of the cortege into a joyful celebration of song and dance.
With so many aged leaders, we can expect an increasing likelihood that one or more may pass in any given year, throwing up the risk of political turmoil and abrupt policy shifts, especially in autocracies where men like Vladimir Putin have ruled with an iron fist for decades without any obvious successor in place.
The best advice for the year ahead is to expect the unexpected.
Background Reading
One of the most fascinating and tragic sets of tarot cards ever made was drawn by Boris Kobe in 1945. Kobe was a Slovenian inmate of the Dachau concentration camp network, and he illustrated daily life and death there in its grotesque detail in the cards. My wish for 2026 is that the world avoids these horrors again.
For an analysis of what Live and Let Die got right and wrong on the traditions of voodoo, see here.
